1.

Selam Installation, a sole proprietorship has the following trial balance as of September 30,2008
Selam Installation
Trial balance
As of September 30, 2008
Cash 8,820
Accounts Receivable 17,825
Supplies 1,800
Prepaid insurance 400
Equipment 22,500
Notes payable 25,000
Accounts Payable 5,000
Selam, Capital 36,720
Selam, Drawing 8,000
Sales 59,750
Wage expense 31,500
Rent expense 1,800
Advertising Expense 5,700
Gas, electricity and water expense 5,650
103,995 126,470
The debit and credit totals are not equal as a result of the following errors;
a. The balance of cash was understated by $ 700
b. A cash receipt of $ 470 was posted as a debit to cash of $ 740
c. A credit of $ 325 to Account receivable was not posted.
d. A return of $ 245 of defective supplies was erroneously posted as a $425 credit to supplies
e. An insurance policy acquired at a cost of $400 was posted as a credit to prepaid insurance.
f. the balance of notes payable was overstated by $5,000
g. A credit of $ 910 in Account payable was overlooked when determining the balance of the account.
h. A debit of $ 1,000 for withdrawal by the owner was posted as a debit to wage expense.
i. The balance of $ 18,000 in rent expense was entered as $ 1,800 in the trial balance.
j. Miscellaneous expense with the balance of $ 1,100 was omitted from the trial balance.
Instruction; Prepare a corrected trail balance as of September 30, 2008
2. The following preliminary trial balance of King Carpet service does not balance.
King Carpet service
Trial balance
As of December 31, 2001
Cash 67,500
Accounts Receivable 17,000
Prepaid insurance 3,300
Equipment 4,500
Accounts Payable 9,850
Salary payable 590
Ermias, Capital 61,250
Ermias, Drawing 24,000
Service revenues 64,940
Salary expense 33,400
Advertising Expense 5,200
Miscellaneous expense 1,490
156,450 137,570
When the ledger and other records are reviewed, you discovered the following
i. The debits and credits in the cash account total $ 67,500 and $ 62,300 respectively.
ii. A sale of $ 500 to a customer on account was not posted to the Account receivable account
iii. A payment of $ 1,900 made to a creditor on account was not posted to the Account payable account
iv. The balance of the salary payable account is $ 950
v. The corrected account balance of equipment account is $ 45,000 and
vi. each account has a normal balance
Instruction; Prepare the corrected trial balance as of December 31, 2001