A Balancing Act Piran, a student in accounting, comes to you, his teacher, with the following difficulty. After a great deal of time and effort, Piran has failed to balance the post-closing trial balance and has become quite frustrated. "Everything was going fine," he says. "My balance sheet balanced. My income statement agreed. I just can't figure it out." Piran's balance sheet, income statement, and post- closing trial balance are given below. BALANCE SHEET Assets Bank $ 1301 Accounts Receivable 7406 Supplies 385 Equipment 19 462 Total Assets $28 554 Liabilities Bank Loan $12 000 Accounts Payable 5 726 Total Liabilities $17 726 Owner's Equity Beginning Balance $26 704 Net Loss Drawings Decrease in Equity 15 876 Ending Balance 10 828 Total Liabilities and Owner's Equity $28 554 Revenue Expenses Advertising Delivery Rent Utilities Wages Net Loss Bank Account Receivable Supplies Equipment Bank Loan Accounts Payable. Ending Capital $ 876 15 000 INCOME STATEMENT $ 3902 3764 12 000 672 12 000 POST-CLOSING TRIAL BALANCE 1 301 7 406 385 19 462 28 554 $31 462 32 338 $ 876 12 000 5726 12 580 30 306 CASE I Questions 1. How can you tell quickly which figure or figures on the post-closing trial balance are probably incorrect? 2. Which figure or figures are wrong in the trial balance? 3. Explain what error or errors Piran has made.