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    Judy Mar Valdez, CPA
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    The trial balance of Sterling Company does not balance, with errors found in the totals of several accounts. Specifically, the debit totals of Rent Deposit, Accounts Payable, and Representation Expense were each understated by P1,000. Accounts Receivable and Service Revenue also contained transposition errors, with the correct balances being P25,700 and P69,600 respectively. Additionally, a payment of P9,400 to taxes payable was not fully recorded. Several accounts also appeared on the wrong side of the trial balance.

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    The trial balance of Sterling Company does not balance, with errors found in the totals of several accounts. Specifically, the debit totals of Rent Deposit, Accounts Payable, and Representation Expense were each understated by P1,000. Accounts Receivable and Service Revenue also contained transposition errors, with the correct balances being P25,700 and P69,600 respectively. Additionally, a payment of P9,400 to taxes payable was not fully recorded. Several accounts also appeared on the wrong side of the trial balance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    19 views1 page

    Illustrative Problem

    Uploaded by

    Judy Mar Valdez, CPA
    The trial balance of Sterling Company does not balance, with errors found in the totals of several accounts. Specifically, the debit totals of Rent Deposit, Accounts Payable, and Representation Expense were each understated by P1,000. Accounts Receivable and Service Revenue also contained transposition errors, with the correct balances being P25,700 and P69,600 respectively. Additionally, a payment of P9,400 to taxes payable was not fully recorded. Several accounts also appeared on the wrong side of the trial balance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    BUSINESS FINANCE_GRADE 12 FORTITUDE

    Illustrative Problem
    The trial balance of Sterling Company does not balance. The review of the general ledger
    reveals that each account has a normal balance.
    Sterling Company
    Trial Balance
    December 31, 2019

    Debit Credit

    Cash P55,800
    Accounts Receivable P27,500
    Rent Deposit 7,000
    Equipment 80,000
    Accounts Payable 45,000
    Taxes Payable 10,300
    Silver, Capital 117,000
    Professional Fees 66,900
    Salaries Expense 42,000
    Advertising Expense 11,000
    Representation Expense 8,000
    Total P259,700 P210,800

    The following errors were discovered:


    a. The totals of debit sides of Rent Deposit, Accounts Payable, and Representation Expense
    were each understated P1,000.
    b. Transposition errors were made in Accounts Receivable and Service Revenue. Based on
    postings made, the correct balances were P25,700 and P69,600, respectively.
    c. Check payment for P9,400 was properly recorded, and the cash credit properly posted,
    but the accountant failed to post to the debit side of the taxes payable account.
    d. The trial balance shows some accounts are not on their proper sides.

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