2 why does it not balance?\njournal\nledger\ntrial balance

2 why does it not balance?\njournal\nledger\ntrial balance

2 why does it not balance?\njournal\nledger\ntrial balance

Answer

Explanation:

Step1: Calculate total debits

Sum up all debit - side amounts: (2669+155 + 490+2000+97+56=$5467)

Step2: Calculate total credits

Sum up all credit - side amounts: (72 + 5000+467=$5539)

Step3: Analyze the error

Notice that the credit amount of Revenue ((155 + 312=$467)) is correct. The error is in the Bank account. In the journal, on February 28, the entry is "Bank 312, Revenue 312". But in the ledger, the Bank account has a debit of 312 (correct as per journal). However, in the trial - balance, the Bank account's debit is (2669) (sum of (3000-490 + 312)). The problem is that the "Expense - Accounts Payable" entry (Expense 72, Accounts Payable 72) is correct. The main error is that the "Accounts Payable" in the trial - balance is only shown as a credit of 72 (correct), but the real issue is that the "Revenue" of (467) is correct. The Bank account's total in the trial - balance is wrong. Wait, re - check: The correct total of debits should be: Bank: (3000+312-490=2822) (initial deposit of (3000), then revenue deposit of (312), and payment of (490) for supplies). But in the given ledger, Bank is calculated as (3000+312-490 - 56-97) (subtracting the amounts for expense (Bank 56) and drawings (Bank 97)). Wait, no. In the journal:

  • February 3: Bank (debit) (3000), Equipment (debit) (2000), Capital (credit) (5000)
  • February 5: Supplies (debit) (490), Bank (credit) (490)
  • February 9: Accounts Receivable (debit) (155), Revenue (credit) (155)
  • February 15: Expense (debit) (56), Bank (credit) (56)
  • February 25: Expense (debit) (72), Accounts Payable (credit) (72)
  • February 28: Bank (debit) (312), Revenue (credit) (312)
  • February 29: Drawings (debit) (97), Bank (credit) (97)

The correct Bank balance: (3000+312-(490 + 56+97)=3000 + 312-643=2669) (correct as per ledger). The correct credit total: Capital ((5000))+Accounts Payable ((72))+Revenue ((155 + 312=467))=(5000+72 + 467=5539) The correct debit total: Bank ((2669))+Accounts Receivable ((155))+Supplies ((490))+Equipment ((2000))+Drawings ((97))+Expense ((56 + 72=128))=(2669+155+490+2000+97+128) (2669+155=2824); (2824+490 = 3314); (3314+2000=5314); (5314+97=5411); (5411+128 = 5539)

The error is that the Expense of (72) (from the "Expense - Accounts Payable" entry) is not included in the trial - balance's debit side.

Answer:

The trial - balance does not balance because the expense of (72) (from the "Expense - Accounts Payable" journal entry) is not included in the debit side of the trial - balance. The correct debit total is (5539) (Bank (2669+)Accounts Receivable (155+)Supplies (490+)Equipment (2000+)Drawings (97+)Expense (56 + 72)) and the credit total is (5000+72+467 = 5539)