The trial balance of Rectangle 120, Inc., at August 31, 2012, does not balance.

Requirements
1. How much out of balance is the trial balance? Determine the out-of-balance amount. The error lies in the Accounts Receivable account. Add the out-of-balance amount to, or subtract it from, Accounts Receivable to determine the correct balance of Accounts Receivable.
2. After correcting Accounts receivable, advise the top management of Rectangle 120, Inc., on the company’s
a. total assets.
b. total liabilities.
c. net income or net loss forAugust.

Transcribed Image Text:

Cash. Accounts receivable...7,400 Retained earnings7,500 $ 3,900 Common stock... $20,100 Accounts payable6,000 Note payable5,500 Advertising expense..1,100 Salary expense..3,300