he accountant for Eva’s Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Eva's Laundry Trial Balance May 31, 2019 Unadjusted Adjusted Debit Balances Credit Balances Debit Balances Credit Balances Cash 8,070 8,070 Accounts Receivable 19,590 23,510 Laundry Supplies 3,920 5,760 Prepaid Insurance* 5,580 1,510 Laundry Equipment 197,120 190,670 Accumulated Depreciation—Laundry Equipment 51,600 51,600 Accounts Payable 10,330 10,330 Wages Payable 1,290 Eva Baldwin, Capital 118,700 118,700 Eva Baldwin, Drawing 30,900 30,900 Laundry Revenue 188,410 188,410 Wages Expense 52,940 52,940 Rent Expense 27,540 27,540 Utilities Expense 19,940 19,940 Depreciation Expense 6,450 Laundry Supplies Expense 1,840 Insurance Expense 850 Miscellaneous Expense 3,440 3,440 369,040 369,040 373,420 370,330 *4,070 of insurance expired during the year. Identify the errors in the accountant’s adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry. If an amount box does not require an entry, leave it blank. Eva's Laundry Adjusted Trial Balance May 31, 2019 Debit Balances Credit Balances Cash fill in the blank 1 fill in the blank 2 Accounts Receivable fill in the blank 3 fill in the blank 4 Laundry Supplies fill in the blank 5 fill in the blank 6 Prepaid Insurance fill in the blank 7 fill in the blank 8 Laundry Equipment fill in the blank 9 fill in the blank 10 Accumulated Depreciation-Laundry Equipment fill in the blank 11 fill in the blank 12 Accounts Payable fill in the blank 13 fill in the blank 14 Wages Payable fill in the blank 15 fill in the blank 16 Eva Baldwin, Capital fill in the blank 17 fill in the blank 18 Eva Baldwin, Drawing fill in the blank 19 fill in the blank 20 Laundry Revenue fill in the blank 21 fill in the blank 22 Wages Expense fill in the blank 23 fill in the blank 24 Rent Expense fill in the blank 25 fill in the blank 26 Utilities Expense fill in the blank 27 fill in the blank 28 Depreciation Expense fill in the blank 29 fill in the blank 30 Laundry Supplies Expense fill in the blank 31 fill in the blank 32 Insurance Expense fill in the blank 33 fill in the blank 34 Miscellaneous Expense fill in the blank 35 fill in the blank 36
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The accountant for Eva’s Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted
| Eva's Laundry | ||||
| Trial Balance | ||||
| May 31, 2019 | ||||
| Unadjusted | Adjusted | |||
| Debit Balances |
Credit Balances |
Debit Balances |
Credit Balances |
|
| Cash | 8,070 | 8,070 | ||
| 19,590 | 23,510 | |||
| Laundry Supplies | 3,920 | 5,760 | ||
| Prepaid Insurance* | 5,580 | 1,510 | ||
| Laundry Equipment | 197,120 | 190,670 | ||
| 51,600 | 51,600 | |||
| Accounts Payable | 10,330 | 10,330 | ||
| Wages Payable | 1,290 | |||
| Eva Baldwin, Capital | 118,700 | 118,700 | ||
| Eva Baldwin, Drawing | 30,900 | 30,900 | ||
| Laundry Revenue | 188,410 | 188,410 | ||
| Wages Expense | 52,940 | 52,940 | ||
| Rent Expense | 27,540 | 27,540 | ||
| Utilities Expense | 19,940 | 19,940 | ||
| Depreciation Expense | 6,450 | |||
| Laundry Supplies Expense | 1,840 | |||
| Insurance Expense | 850 | |||
| Miscellaneous Expense | 3,440 | 3,440 | ||
| 369,040 | 369,040 | 373,420 | 370,330 |
*4,070 of insurance expired during the year.
Identify the errors in the accountant’s adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry. If an amount box does not require an entry, leave it blank.
| Eva's Laundry | ||
| Adjusted Trial Balance | ||
| May 31, 2019 | ||
| Debit Balances | Credit Balances | |
| Cash | fill in the blank 1 | fill in the blank 2 |
| Accounts Receivable | fill in the blank 3 | fill in the blank 4 |
| Laundry Supplies | fill in the blank 5 | fill in the blank 6 |
| Prepaid Insurance | fill in the blank 7 | fill in the blank 8 |
| Laundry Equipment | fill in the blank 9 | fill in the blank 10 |
| Accumulated Depreciation-Laundry Equipment | fill in the blank 11 | fill in the blank 12 |
| Accounts Payable | fill in the blank 13 | fill in the blank 14 |
| Wages Payable | fill in the blank 15 | fill in the blank 16 |
| Eva Baldwin, Capital | fill in the blank 17 | fill in the blank 18 |
| Eva Baldwin, Drawing | fill in the blank 19 | fill in the blank 20 |
| Laundry Revenue | fill in the blank 21 | fill in the blank 22 |
| Wages Expense | fill in the blank 23 | fill in the blank 24 |
| Rent Expense | fill in the blank 25 | fill in the blank 26 |
| Utilities Expense | fill in the blank 27 | fill in the blank 28 |
| Depreciation Expense | fill in the blank 29 | fill in the blank 30 |
| Laundry Supplies Expense | fill in the blank 31 | fill in the blank 32 |
| Insurance Expense | fill in the blank 33 | fill in the blank 34 |
| Miscellaneous Expense | fill in the blank 35 | fill in the blank 36 |
A trial balance is a schedule in which total of debit column is always equals to credit. If there is any disagreement in the debit and credit side that means there is an error in the ledger balances.
Rules of trial balance:
- All assets and expenses are shown on the debit side of trial balance.
- All revenue and liabilities are shown on the credit side of trial balance.
- Capital is shown on the credit side ad drawing on the debit side.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
