Concept explainers
Accounting cycle;
• LO2–3, LO2–5 through LO2–7
Refer to P 2–3 and complete the following steps:
1. Enter the unadjusted balances from the trial balance into T-accounts.
2. Post the adjusting entries prepared in P 2–3 to the accounts.
3. Prepare an adjusted trial balance.
4. Prepare an income statement and a statement of shareholders’ equity for the year ended December 31, 2018, and a classified
5. Prepare closing
6. Prepare a post-closing trial balance.
1.
Accounting Cycle:
Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.
T-account:
- T-account is the form of the ledger account, where the journal entries are posted to this account. It is referred to as the T-account, because the alignment of the components of the account resembles the capital letter ‘T’.
- The components of the T-account are as follows:
-
- a) The title of the account
- b) The left or debit side
- c) The right or credit side
Adjusted Trial Balance:
An adjusted trial balance refers to the final trial balance resulting after posting the adjusting entries at the end of the period.
Closing Entries:
Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the period, to transfer the final balance.
Post-closing trial balance:
After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.
Income statement
This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time. It is prepared to find out the net income of an organization.
Balance sheet
Balance sheet is a financial position statement which represents all the assets, liabilities, and stockholders’ equity of a concern on a particular date. The balance sheet displays that on a particular date all the assets of a concern must be equal to the sum of liabilities and stockholders’ equity.
To Enter: The unadjusted balances from the trial balance into T-accounts.
Explanation of Solution
Prepare T-accounts for balance sheet accounts from the unadjusted trial balance:
Cash Account:
Cash Account
December 31 | $30,000 | ||||
December 31 | $30,000 |
Accounts Receivable:
Accounts Receivable Account
December 31 | $40,000 | ||||
December 31 | $40,000 |
Prepaid Rent:
Prepaid Rent Account
December 31 | $2,000 | ||||
December 31 | $2,000 |
Prepaid Insurance:
Prepaid Insurance Account
December 31 | 0 | ||||
December 31 |
0 |
Supplies:
Supplies Account
December 31 | $1,500 | ||||
December 31 | $1,500 |
Inventory:
Inventory Account
December 31 | $60,000 | ||||
December 31 | $60,000 |
Note receivable:
Note receivable Account
December 31 | $20,000 | ||||
December 31 | $20,000 |
Office Equipment:
Office Equipment Account
December 31 | $80,000 | ||||
December 31 | $80,000 |
Interest Receivable:
Interest Receivable Account
December 31 | 0 | ||||
December 31 | 0 |
Accumulated Depreciation:
Accumulated Depreciation Account
December 31 | $30,000 | ||||
December 31 | $30,000 |
Accounts Payable:
Accounts Payable Account
December 31 | $31,000 | ||||
December 31 | $31,000 |
Salaries and Wages Payable:
Salaries and Wages Payable Account
December 31 | 0 | ||||
December 31 | 0 |
Note Payable:
Note Payable Account
December 31 | $50,000 | ||||
December 31 | $50,000 |
Interest Payable:
Interest Payable Account
December 31 | 0 | ||||
December 31 | 0 |
Deferred Revenue:
Deferred Revenue Account
December 31 | 0 | ||||
December 31 | 0 |
Common Stock:
Common Stock Account
December 31 | $60,000 | ||||
December 31 | $60,000 |
Retained Earnings:
Retained Earnings Account
December 31 | $24,500 | ||||
December 31 | $24,500 |
Prepare T-accounts for income statement accounts from the unadjusted trial balance:
Sales Revenue:
Sales Revenue Account
December 31 | $148,000 | ||||
December 31 | $148,000 |
Interest Revenue:
Interest Revenue Account
December 31 | 0 | ||||
December 31 | 0 |
Cost of Goods Sold:
Cost of Goods Sold Account
December 31 | $70,000 | ||||
December 31 | $70,000 |
Salaries and Wages expense:
Salaries and Wages expense Account
December 31 | $18,900 | ||||
December 31 | $18,900 |
Rent Expense:
Rent Expense Account
December 31 | $11,000 | ||||
December 31 | $11,000 |
Depreciation Expense:
Depreciation Expense Account
December 31 | 0 | ||||
December 31 | 0 |
Interest Expense:
Interest Expense Account
December 31 | 0 | ||||
December 31 | 0 |
Supplies Expense:
Supplies Expense Account
December 31 | $1,100 | ||||
December 31 | $1,100 |
Insurance Expense:
Insurance Expense Account
December 31 | $6,000 | ||||
December 31 | $6,000 |
Advertising Expense:
Advertising Expense Account
December 31 | $3,000 | ||||
December 31 | $3,000 |
2.
To Post: The adjusting entries to the T-accounts.
Explanation of Solution
Post the adjusting entries in T-accounts for balance sheets accounts as follows:
Cash Account:
Cash Account
December 31 | $30,000 | ||||
December 31 | $30,000 |
Accounts Receivable:
Accounts Receivable Account
December 31 | $40,000 | ||||
December 31 | $40,000 |
Prepaid Rent:
Prepaid Rent Account
December 31 | $2,000 | ||||
8. | $1,000 | ||||
December 31 | $1,000 |
Prepaid Insurance:
Prepaid Insurance Account
December 31 | 0 | ||||
5 | $3,750 | ||||
December 31 |
$3,750 |
Supplies:
Supplies Account
December 31 | $1,500 | ||||
6. | $700 | ||||
December 31 | $800 |
Inventory:
Inventory Account
December 31 | $60,000 | ||||
December 31 | $60,000 |
Note receivable:
Note receivable Account
December 31 | $20,000 | ||||
December 31 | $20,000 |
Office Equipment:
Office Equipment Account
December 31 | $80,000 | ||||
December 31 | $80,000 |
Interest Receivable:
Interest Receivable Account
December 31 | 0 | ||||
4. | $1,333 | ||||
December 31 | $1,333 |
Accumulated Depreciation:
Accumulated Depreciation Account
December 31 | $30,000 | ||||
1 | $10,000 | ||||
December 31 | $40,000 |
Accounts Payable:
Accounts Payable Account
December 31 | $31,000 | ||||
December 31 | $31,000 |
Salaries and Wages Payable:
Salaries and Wages Payable Account
December 31 | 0 | ||||
2 | $1,500 | ||||
December 31 | $1,500 |
Note Payable:
Note Payable Account
December 31 | $50,000 | ||||
December 31 | $50,000 |
Interest Payable:
Interest Payable Account
December 31 | 0 | ||||
3 | $1,500 | ||||
December 31 | $1,500 |
Deferred Revenue:
Deferred Revenue Account
December 31 | 0 | ||||
7 | $2,000 | ||||
December 31 | $2,000 |
Common Stock:
Common Stock Account
December 31 | $60,000 | ||||
December 31 | $60,000 |
Retained Earnings:
Retained Earnings Account
December 31 | $24,500 | ||||
December 31 | $24,500 |
Prepare T-accounts for income statement accounts from the unadjusted trial balance:
Sales Revenue:
Sales Revenue Account
December 31 | $148,000 | ||||
7. | $2,000 | ||||
December 31 | $146,000 |
Interest Revenue:
Interest Revenue Account
December 31 | 0 | ||||
4. | $1,333 | ||||
December 31 | $1,333 |
Cost of Goods Sold:
Cost of Goods Sold Account
December 31 | $70,000 | ||||
December 31 | $70,000 |
Salaries and Wages expense:
Salaries and Wages expense Account
December 31 | $18,900 | ||||
2. | $1,500 | ||||
December 31 | $20,400 |
Rent Expense:
Rent Expense Account
December 31 | $11,000 | ||||
8. | $1,000 | ||||
December 31 | $12,000 |
Depreciation Expense:
Depreciation Expense Account
December 31 | 0 | ||||
1. | $10,000 | ||||
December 31 | $10,000 |
Interest Expense:
Interest Expense Account
December 31 | 0 | ||||
3. | $1,500 | ||||
December 31 | $1,500 |
Supplies Expense:
Supplies Expense Account
December 31 | $1,100 | ||||
6. | $700 | ||||
December 31 | $1,800 |
Insurance Expense:
Insurance Expense Account
December 31 | $6,000 | ||||
5. | $3,750 | ||||
December 31 | $2,250 |
Advertising Expense:
Advertising Expense Account
December 31 | $3,000 | ||||
December 31 | $3,000 |
3.
To Prepare: An adjusted trial balance.
Explanation of Solution
Prepare an adjusted trial balance:
Account Title | Debit ($) | Credit ($) |
Cash | 30,000 | |
Accounts Receivable | 40,000 | |
Prepaid rent | 1,000 | |
Prepaid insurance | 3,750 | |
Supplies | 800 | |
Inventory | 60,000 | |
Note receivable | 20,000 | |
Interest receivable | 1,333 | |
Office equipment | 80,000 | |
Accumulated depreciation – office equipment | 40,000 | |
Accounts payable | 31,000 | |
Salaries and wages payable | 1,500 | |
Note payable | 50,000 | |
Interest payable | 1,500 | |
Deferred revenue | 2,000 | |
Common stock | 60,000 | |
Retained earnings | 24,500 | |
Sales revenue | 146,000 | |
Interest revenue | 1,333 | |
Cost of goods sold | 70,000 | |
Salaries and wages expense | 20,400 | |
Rent expense | 12,000 | |
Depreciation expense | 10,000 | |
Interest expense | 1,500 | |
Supplies expense | 1,800 | |
Insurance expense | 2,250 | |
Advertising expense | 3,000 | |
Totals | $357,833 | $357,833 |
Table (1)
4.
To Prepare: An income statement, a statement of shareholder’s equity for the year ended December 31, 2018, and a classified balance sheet.
Explanation of Solution
Prepare income statement for P Company for the year ended December 31, 2018.
P Company Income Statement For the Year Ended December 31, 2018 |
||
Particulars | Amount | Amount |
Sales revenue | 146,000 | |
Less: Cost of goods sold | 70,000 | |
Gross Profit | 76,000 | |
Less: Operating Expenses: | ||
Salaries and wages expense | 20,400 | |
Rent expense | 12,000 | |
Depreciation expense | 10,000 | |
Supplies expense | 1,800 | |
Insurance expense | 2,250 | |
Advertising expense | 3,000 | |
Total operating expenses | 49,450 | |
Operating income | $26,550 | |
Other income (expense): | ||
Interest revenue | 1,333 | |
Less: Interest expense | (1,500) | (167) |
Net Income | $26,383 |
Table (2)
Prepare statement of shareholders’ equity for P Company for the year ended December 31, 2018.
P Company | |||
Statement of shareholders’ equity | |||
For the year ended December 31, 2018 | |||
Particulars | Common stock ($) | Retained earnings ($) | Total shareholders’ equity ($) |
Beginning at January 1, 2018 | 60,000 | 28,500 | 88,500 |
Issue of common stock | 0 | 0 | 0 |
Net income for 2018 | 26,383 | 26,383 | |
Less: Dividends | 0 | (4,000) | (4,000) |
Balance at December 31, 2018 | $60,000 | $50,883 | $110,883 |
Table (3)
Prepare a classified balance sheet for P Company at December 31, 2018 as follows;
P Company | ||
Balance Sheet | ||
December 31, 2018 | ||
Assets | ||
Current assets: | Amount ($) | Amount ($) |
Current assets: | ||
Cash | 30,000 | |
Accounts receivables | 40,000 | |
Supplies | 800 | |
Inventory | 60,000 | |
Note receivable | 20,000 | |
Interest receivable | 1,333 | |
Prepaid rent | 1,000 | |
Prepaid insurance | 3,750 | |
Total current assets | 156,883 | |
Property, plant and equipment: | ||
Office equipment | 80,000 | |
Less: Accumulated depreciation | (40,000) | |
Net property, plant and equipment | 40,000 | |
Total assets | $196,883 | |
Liabilities and shareholders’ Equity | ||
Current liabilities: | ||
Accounts payable | 31,000 | |
Salaries and wages payable | 1,500 | |
Note payable | 50,000 | |
Interest payable | 1,500 | |
Deferred revenue | 2,000 | |
Total current liabilities | 86,000 | |
Shareholders’ equity: | ||
Common stock | 60,000 | |
Retained earnings | 50,883 | |
Total shareholders’ equity | 110,883 | |
Total liabilities and shareholders’ equity | $196,883 |
Table (4)
5.
To Prepare: The closing entries, and also post the closing entries.
Explanation of Solution
Prepare closing entries for the month ended December 31, 2018.
Date | Accounts title and explanation | Post Ref. | Debit ($) |
Credit ($) |
December 31 2018 | Sales Revenue (SE-) | 146,000 | ||
Interest Revenue (SE-) | 1,333 | |||
Income Summary (SE+) | 147,333 | |||
(To close the revenue accounts) | ||||
December 31 2018 | Income Summary (SE-) | 120,950 | ||
Cost of Goods Sold (SE+) | 70,000 | |||
Salaries and Wages Expense (SE+) | 20,400 | |||
Rent Expense (SE+) | 12,000 | |||
Depreciation Expense (SE+) | 10,000 | |||
Interest Expense (SE+) | 1,500 | |||
Supplies Expense (SE+) | 1,800 | |||
Insurance Expense (SE+) | 2,250 | |||
Advertising Expense (SE+) | 3,000 | |||
(To close the expense accounts) | ||||
December 31 2018 | Income Summary (SE-) | 26,383 | ||
Retained Earnings (SE+) | 26,383 | |||
(To close the income summary account) |
Table (5)
To Post: The closing entries in T-accounts.
Sales Revenue:
Sales Revenue Account
December 31 | $148,000 | ||||
7. | $2,000 | ||||
December 31 | $146,000 (Closing) | ||||
December 31 | 0 |
Interest Revenue:
Interest Revenue Account
December 31 | 0 | ||||
4. | $1,333 | ||||
December 31 | $1,333 (Closing) | ||||
December 31 | 0 |
Cost of Goods Sold:
Cost of Goods Sold Account
December 31 | $70,000 | ||||
December 31 | $70,000 (Closing) | ||||
December 31 | 0 |
Salaries and Wages expense:
Salaries and Wages expense Account
December 31 | $18,900 | ||||
2. | $1,500 | ||||
December 31 | $20,400 (Closing) | ||||
December 31 | 0 |
Rent Expense:
Rent Expense Account
December 31 | $11,000 | ||||
8. | $1,000 | ||||
December 31 | $12,000 (Closing) | ||||
December 31 | 0 |
Depreciation Expense:
Depreciation Expense Account
December 31 | 0 | ||||
1. | $10,000 | ||||
December 31 | $10,000 (Closing) | ||||
December 31 | 0 |
Interest Expense:
Interest Expense Account
December 31 | 0 | ||||
3. | $1,500 | ||||
December 31 | $1,500 (Closing) | ||||
December 31 | 0 |
Supplies Expense:
Supplies Expense Account
December 31 | $1,100 | ||||
6. | $700 | ||||
December 31 | $1,800 (Closing) | ||||
December 31 | 0 |
Insurance Expense:
Insurance Expense Account
December 31 | $6,000 | ||||
5. | $3,750 | ||||
December 31 | $2,250 (Closing) | ||||
December 31 | 0 |
Advertising Expense:
Advertising Expense Account
December 31 | $3,000 | ||||
December 31 | $3,000 (Closing) | ||||
December 31 | 0 |
Income Summary:
Income Summary Account
December 31 | 0 | ||||
December 31 | $120,950 (Closing) | December 31 | $147,333 (Closing) | ||
December 31 | $26,383 (Closing) | ||||
December 31 | 0 |
Retained Earnings:
Retained Earnings Account
December 31 | $24,500 | ||||
December 31 | 26,383 (Closing) | ||||
December 31 | $50,883 |
6.
To Prepare: A post-closing trial balance.
Explanation of Solution
Prepare a post closing trial balance for P Company at December 31, 2018.
Account title | Debit ($) | Credit ($) |
Cash | 30,000 | |
Accounts receivable | 40,000 | |
Prepaid rent | 1,000 | |
Prepaid insurance | 3,750 | |
Supplies | 800 | |
Inventory | 60,000 | |
Note receivable | 20,000 | |
Interest receivable | 1,333 | |
Office equipment | 80,000 | |
Accumulated depreciation – office equipment | 40,000 | |
Accounts payable | 31,000 | |
Salaries and wages payable | 1,500 | |
Note payable | 50,000 | |
Interest payable | 1,500 | |
Deferred revenue | 2,000 | |
Common stock | 60,000 | |
Retained earnings | 50,883 | |
Totals | $236,883 | $236,883 |
Table (5)
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Chapter 2 Solutions
GEN CMB INTRM ACCTG; CNCT 9E 2
- Ledger accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trill balance of Recessive Interior, at January 31, 20Y2, the end of the year, follows: The data needed to determine year-end adjustments are as follows: (a) Supplies on hand at January 31 are 2,850 (b) Insurance premium expired during the year are 3,150. (c) Depreciation of equipment during the year is 5,250 (d) Depreciation of trucks during the year is 4,000. (e) Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors chart if accounts should be used: Wages Payable, 22; Depreciation ExpenseEquipment, 54; Supplies Expense. 55; Depreciation ExpenseTrucks. 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended January 31, 20Y2, additional common stock of 7,500 was issued. 6. Journalize and post the dining entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forwardFinancial statements and closing entries Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows: Instructions 1.Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 2.Journalize the entries that were required to close the accounts at June 30. 3If Stacy Tanner, Capital has instead decreased 30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss?arrow_forwardLedger accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: The data needed to determine year-end adjustments are as follows: a. Supplies on hand at January 31 are 2,850. b. Insurance premiums expired during the year are 3,150. c. Depreciation of equipment during the year is 5,250. d. Depreciation of trucks during the year is 4,000. e. Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. a. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors' chart of accounts should be used: Wages Payable, 22; Depreciation ExpenseEquipment, 54; Supplies Expense, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forward
- Adjusting entries and adjusted trial balances Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services' accounting clerk prepared the following unadjusted trial balance at July 31, 2019: Reece Financial Services Co. Unadjusted Trial Balance July 31,2019 Debit Balances Credit Balances Cash 10,200 Accounts Receivable 34,750 Prepaid Insurance 6.000 Supplies 1,725 Land 50,000 Building 155,750 Accumulated DepreciationBuilding 62,850 Equipment 45,000 Accumulated DepreciationEquipment 17,650 Accounts Payable 3,750 Unearned Rent 3,600 Joni Reece, Capital 153,550 Joni Reece, Drawing 8,000 Fees Earned 158,600 Salaries and Wages Expense 56,850 Utilities Expense 14,100 Advertising Expense 7,500 Repairs Expense 6,100 Miscellaneous Expense 4,025 400,000 400,000 The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. Depreciation of equipment for the year, 2,800. Accrued salaries and wages at July 31, 900. Unexpired insurance at July 31, 1,500. Fees earned but unbilled on July 31, 10,200. Supplies on hand at July 31, 615. Rent unearned at July 31, 300. Instructions 1.Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. 2.Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.arrow_forwardAdjusting entries The Signage Company specializes in the maintenance and repair of signs, such as billboards. On March 31, 2019, the accountant for The Signage Company prepared the trial balances shown at the top of the following page. Instructions Journalize the seven entries that adjusted the accounts at March 31. None of the accounts were affected by more than one adjusting entry.arrow_forwardAdjustment data on an end-of-period spreadsheet Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security Services Co. has been prepared on the following end-of-period spreadsheet for the year ended October 31, 2019: Accum. Depr.Equipment 4 Accounts Payable 36 Wages Payable 0 Brenda Schultz, Capital 260 Brenda Schultz, Drawing 8 Fees Earned 200 Wages Expense 110 Rent Expense 12 Insurance Expense 0 Utilities Expense 6 Supplies Expense 0 Depreciation Expense 0 Miscellaneous Expense 2 500 500 The data for year-end adjustments are as follows: a.Fees earned but not yet billed, 13 b.Supplies on hand, 4. c.Insurance premiums expired, 10. d.Depreciation expense, 3. e.Wages accrued but not paid, 1. Enter the adjustment data and place the balances in the Adjusted Trial Balance columns.arrow_forward
- T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Epicenter Laundry at June 30, 2016, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: a. Laundry supplies on hand at June 30 are 3,600. b. Insurance premiums expired during the year are 5,700. c. Depreciation of laundry equipment during the year is 6,500. d. Wages accrued but not paid at June 30 are 1,100. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as "June 30 Bal." In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by "Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forwardT accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 2019, the end of the fiscal year, follows: La Mesa Laundry Unadjusted Trial Balance August 31,2019 Debit Balances Credit Balances Cash 3,800 Laundry Supplies 9,000 Prepaid Insurance 6,000 Laundry Equipment 180,800 Accumulated Depreciation 49,200 Accounts Payable 7,800 Bobbi Downey. Capital 95,000 Bobbi Downey. Drawing 2,400 Laundry Revenue 248,000 Wages Expense 135,800 Rent Expense 43,200 Utilities Expense 16,000 Miscellaneous Expense 3,000 400,000 400,000 The data needed to determine year-end adjustments are as follows: a.Wages accrued but not paid at August 31 are 2,200. b.Depreciation of equipment during the year is 8,150. c.Laundry supplies on hand at August 31 are 2,000. d.Insurance premiums expired during the year are 5,300. Instructions 1.For each account listed in the unadjusted trial balance, enter the balance in a T account. Identity the balance as "Aug. 31 Bal." In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3.Journalize and post the adjusting entries. Identity the adjustments as "Adj." and the new balances as "Adj. Bal." 4.Prepare an adjusted trial balance. 5.Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 6.Journalize and post the closing entries. Identify the closing entries as "Clos." 7.Prepare a post-closing trial balance.arrow_forwardAdjusting entries The Signage Company specializes in the maintenance and repair of signs, such as billboards. On March 31, 20Y6, the accountant for The Signage Company prepared the trial balances shown at the top of the following page. Instructions Journalize the seven entries that adjusted the accounts at March 31. None of the accounts were affected by more than one adjusting entry.arrow_forward
- T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Epicenter Laundry at June 30, 2019, the end of the fiscal year, follows: Epicenter Laundry Unadjusted Trial Balance June 30,2019 Debit Balances Credit Balances Cash 11,000 Laundry Supplies 21,500 Prepaid Insurance 9,600 Laundry Equipment 232,600 Accumulated Depreciation 125,400 Accounts Payable 11,800 Sophie Perez, Capital 105,600 Sophie Perez, Drawing 10,000 Laundry Revenue 232,200 Wages Expense 125,200 Rent Expense 40,000 Utilities Expense 19,700 Miscellaneous Expense 5,400 475,000 475,000 The data needed to determine year-end adjustments are as follows: a.Laundry supplies on hand at June 30 are 3,600. b.Insurance premiums expired during the year are 5,700. c.Depreciation of laundry equipment during the year is 6,500. d.Wages accrued but not paid at June 30 are 1,100. Instructions 1.For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as "June 30 Bal." In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3.Journalize and post the adjusting entries. Identify the adjustments as "Adj." and the new balances as "Adj. Bal." 4.Prepare an adjusted trial balance. 5.Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 6.Journalize and post the closing entries. Identify the closing entries as "Clos." 7.Prepare a post-closing trial balance.arrow_forwardFinancial statements and closing entries Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services pre pared an end-of-period spreadsheet, a part of which follows: A F G 1 Foxy Investigative Services 2 End-of-Period Spreadsheet 3 For the Year Ended November 30, 2018 4 Adjusted Trial Balance 6 Account Title Dr. Cr. 7 8 Cash 27,500 9 Accounts Receivable 71,800 10 Supplies 3,550 11 Prepaid Insurance 750 12 Building 330,500 13 Accumulated DepreciationBuilding I // 184,100 14 Accounts Payable 16,100 15 Salaries Payable 6,600 16 Unearned Rent 1,500 17 Common Stock 40,000 18 Retained Earnings 70,300 19 Dividends 30,000 20 Service Fees 675,500 21 Rent Revenue 9,000 22 Salaries Expense 435,000 23 Rent Expense 55,000 24 Supplies Expense 11,850 25 Depreciation Expense Building 10,000 26 Utilities Expense 8,800 27 Repairs Expense 4,250 28 Insurance Expense 3,000 29 Miscellaneous Expense 11,100 30 1,003,100 1,003,100 Instructions 1. Prepare an income statement, a retained earnings statement, and a balance sheet. 2. Journalize the entries that were required to close the accounts at November 30. 3. If Retained Earnings had instead decreased 46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss?arrow_forward
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