This trial balance of Queenstown Ltd does not balance.

Each of the listed accounts has a normal balance. An examination of the ledger and journal reveals the following errors: 

1. Cash received from a customer on account was debited to Cash for $3420, and Accounts Receivable was credited for the same amount. The actual collection was for $4320. 

2. The purchase of a scientific calculator on account for $500 was recorded as a debit to Supplies for $500 and a credit to Accounts Payable for $500.

3. Services were performed on account for a client for $6240. Accounts Receivable was debited for $6240 and Service Revenue was credited for $624.

4. A debit posting to Salaries Expense of $4500 was omitted.

5. A payment on account for $2136 was credited to Cash for $2136 and credited to Accounts Payable for $2163.

6. Payment of a $3300 cash dividend to Queenstown Ltd’s shareholders was debited to Salaries Expense for $3300 and credited to Cash for $3300.

Required

(a) Prepare the correct trial balance.

(b) Explain what adjustments were made and why they were necessary.  

Transcribed Image Text:

Account name Cash Accounts Receivable Supplies Equipment Accounts Payable Revenue Received in Advance Share Capital Dividends Service Revenue Salaries Expense Office Expense QUEENSTOWN LTD Trial balance as at 30 June 2017 Debit $21 093 5700 18900 8100 5700 21 300 6360 $87 153 Credit $ 17940 16 896 60 000 15 180 $110016