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The Lexington Group has the following unadjusted trial balance as of May 31, 2018:

The Lexington Group

UNADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	20,350.00
2	Accounts Receivable	37,000.00
3	Supplies	1,100.00
4	Prepaid Insurance	200.00
5	Equipment	171,175.00
6	Notes Payable		36,000.00
7	Accounts Payable		26,000.00
8	Common Stock		50,000.00
9	Retained Earnings		94,150.00
10	Dividends	15,000.00
11	Fees Earned		429,850.00
12	Wages Expense	270,000.00
13	Rent Expense	63,000.00
14	Advertising Expense	25,200.00
15	Miscellaneous Expense	5,100.00
16	Totals	608,125.00	636,000.00

The debit and credit totals are not equal as a result of the following errors:

A.	The cash entered on the trial balance was overstated by $7,000.
B.	A cash receipt of $8,200 was posted as a debit to Cash of $2,800.
C.	A debit of $16,500 to Accounts Receivable was not posted.
D.	A return of $125 of defective supplies was erroneously posted as a $1,250 credit to Supplies.
E.	An insurance policy acquired at a cost of $3,600 was posted as a credit to Prepaid Insurance.
F.	The balance of Notes Payable was understated by $9,000.
G.	A credit of $10,000 in Accounts Payable was overlooked when determining the balance of the account.
H.	A debit of $5,000 for dividends was posted as a credit to Retained Earnings.
I.	The balance of $60,300 in Rent Expense was entered as $63,000 in the trial balance.
J.	Gas, Electricity, and Water Expense, with a balance of $16,350, was omitted from the trial balance.

	Required:
1.	Prepare a corrected unadjusted trial balance as of May 31, 2018.
2.	Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts?

Unadjusted Trial Balance

1. Prepare a corrected unadjusted trial balance as of May 31, 2018.

The Lexington Group

UNADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Insurance
5	Equipment
6	Notes Payable
7	Accounts Payable
8	Common Stock
9	Retained Earnings
10	Dividends
11	Fees Earned
12	Wages Expense
13	Rent Expense
14	Advertising Expense
15	Gas, Electricity, and Water Expense
16	Miscellaneous Expense
17	Totals

Final Question

2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts?

Please answer question filling in the blanks. Thank you!

Answer & Explanation Solved by verified expert

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