E2-72 (L earn i ng Obj ec tiv es 4 , 6: Analy z e t he imp ac t o f bu s i ness t ransac ti ons on a
E2-72 (Learning Objectives 4, 6: Analyze the impact of business transactions on accounts; construct and use a trial balance) The trial balance of Rectangle 120, Inc., at August 31, 2012, does not balance.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines
Order Paper Now
Cash………………………………
$ 3,900
Common stock………………..
$20,100
Accounts receivable………….
7,400
Retained earnings…………….
7,500
Land………………………………
34,400
Service revenue………………..
9,500
Accounts payable …………….
6,000
Salary expense…………………
3,300
Note payable…………………..
5,500
Advertising expense………….
1,100
▶ 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 for August.
