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T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows: 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. Identify 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. 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 stockholders’ equity, and a balance sheet. During the year ended August 31, 20Y5, common stock of $3,000 was issued. 6. Journalize and post the closing entries. Identify the closing entries by “Clos.” 7. Prepare a post-closing trial balance.
Financial And Managerial Accounting
Solutions
Financial And Managerial Accounting
T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet
The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows:
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. Identify 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. 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 stockholders’ equity, and a balance sheet. During the year ended August 31, 20Y5, common stock of $3,000 was issued.
- 6. Journalize and post the closing entries. Identify the closing entries by “Clos.”
- 7. Prepare a post-closing trial balance.
1.
Prepare the T-accounts and identify the balance as of August 31.
Explanation of Solution
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
Prepare the T-accounts:
2.
Enter the unadjusted trial balance on an end of period spreadsheet and complete the spread sheet.
3.
Prepare the adjusting entries and post the entries into the T-accounts.
4.
Prepare an adjusted trial balance.
5.
Prepare an income statement, a statement of stockholders’ equity and a balance sheet for the year ended August 31, 20Y5.
6.
Prepare the closing entries and post the closing entries into the T-accounts.
7.
Prepare a post-closing trial balance.
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