This trial balance of Lagerstrom Company does not balance.
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LAGERSTROM COMPANY
Trial Balance
May 31, 2012
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Debit
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Credit
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Cash
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$6,340
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Accounts Receivable
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$2,750
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Prepaid Insurance
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700
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Equipment
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8,000
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Accounts Payable
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4100
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Income Taxes Payable
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850
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Common Stock
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5,700
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Retained Earnings
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6,000
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Service Revenue
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7,690
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Salaries and Wages Expense
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4,200
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Advertising Expense
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1100
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Income Tax Expense
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900
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$28,680
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$19,650
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Your review of the ledger reveals that each account has a normal balance. You also discover the following errors.
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Income Tax Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $7,960, respectively.
3. A debit posting to Salaries and Wages Expense of $500 was omitted.
4. A $600 cash dividend was debited to Common Stock for $600 and credited to Cash for $600.
5. A $350 purchase of supplies on account was debited to Equipment for $350 and credited to Cash for $350.
6. A cash payment of $490 for advertising was debited to Advertising Expense for $49 and credited to Cash for $49.
7. A collection from a customer for $240 was debited to Cash for $240 and credited to Accounts Payable for $240.
Instructions
Prepare the correct trial balance, assuming all accounts have normal balances. (Note:The chart of accounts also includes the following: Dividends and Supplies.)