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Posted on Oct 22, 2024

Trial Balance: Unequal Totals The intern has prepared the following trial balance for the month of March. KL Company Inc. Unadjusted Trial Balance March 31,

Trial Balance: Unequal Totals

The intern has prepared the following trial balance for the month of March.

KL Company Inc. Unadjusted Trial Balance March 31, 20Y3
Account Title	Debit Balances	Credit Balances
Cash	23,825
Accounts Receivable		3,775
Supplies	1,825
Office Equipment	17,500
Accounts Payable	1,600
Notes Payable		17,500
Common Stock		12,000
Retained Earnings	1,425
Dividends		1,900
Fees Earned		9,875
Rent Expense	3,200
Wages Expense		3,375
	49,375	48,425

Trial Balance: Correct

The Trial Balance: Unequal Totals was prepared by the intern. The intern is puzzled by the unequal totals. Prepare a corrected trial balance. If an amount box does not require an entry, leave it blank.

KL Company Inc. Unadjusted Trial Balance March 31, 20Y3
Account Title	Debit Balances	Credit Balances
Cash	fill in the blank a3a10600b07ffa4_1	fill in the blank a3a10600b07ffa4_2
Accounts Receivable	fill in the blank a3a10600b07ffa4_3	fill in the blank a3a10600b07ffa4_4
Supplies	fill in the blank a3a10600b07ffa4_5	fill in the blank a3a10600b07ffa4_6
Office Equipment	fill in the blank a3a10600b07ffa4_7	fill in the blank a3a10600b07ffa4_8
Accounts Payable	fill in the blank a3a10600b07ffa4_9	fill in the blank a3a10600b07ffa4_10
Notes Payable	fill in the blank a3a10600b07ffa4_11	fill in the blank a3a10600b07ffa4_12
Common Stock	fill in the blank a3a10600b07ffa4_13	fill in the blank a3a10600b07ffa4_14
Retained Earnings	fill in the blank a3a10600b07ffa4_15	fill in the blank a3a10600b07ffa4_16
Dividends	fill in the blank a3a10600b07ffa4_17	fill in the blank a3a10600b07ffa4_18
Fees Earned	fill in the blank a3a10600b07ffa4_19	fill in the blank a3a10600b07ffa4_20
Rent Expense	fill in the blank a3a10600b07ffa4_21	fill in the blank a3a10600b07ffa4_22
Wages Expense	fill in the blank a3a10600b07ffa4_23	fill in the blank a3a10600b07ffa4_24
	fill in the blank a3a10600b07ffa4_25	fill in the blank a3a10600b07ffa4_26

Errors on Trial Balance

Compare the trial balance prepared by the intern (Trial Balance: Unequal Totals) to the trial balance that you prepared (Trial Balance: Correct). In the following table, select the accounts for each type of error. Not all accounts contain errors.

Error Type

Cash

Accounts Receivable

Supplies

Office Equipment

Accounts Payable

Notes Payable

Common Stock

Retained Earnings

Dividends

Fees Earned

Rent Expense

Wages Expense

Transposition

YesNo

Incorrectly reported as a debit

YesNo

Incorrectly reported as a credit

YesNo

Balance computed incorrectly

YesNo

Accounting Equation

The intern is puzzled and asks "Are you sure the accounting equation is still in balance?" Using the corrected trial balance you prepared, prove that the accounting equation is in balance.

Assets	=	Liabilities	+	Stockholders' Equity
$fill in the blank 7c01ad002042010_1	=	$fill in the blank 7c01ad002042010_2	+	$fill in the blank 7c01ad002042010_3

Still puzzled, the intern asks "Why do none of the amounts in the accounting equation equal the totals on the trial balance?"

a.	The accounts with debit balances are not all classified in the same element of the accounting equation. For example, not all accounts with debit balances are assets.
b.	This is because the revenue and expense accounts are part of the stockholders equity element. The accounts with debit balances should be part of the total assets.
c.	You point out the total of the assets, liabilities and stockholders equity is equal to the sum of the debit and credit totals on the trial balance.
d.	The accounts with credit balances are not all classified in the same element of the accounting equation. For example, not all accounts with credit balances are liabilities.
e.	The accounts that make up the total for stockholders equity have a mix of debit and credit balances.