Chapter 4, Problem 4.3APR

T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet

The unadjusted trial balance of Epicenter Laundry at June 30, 2018, the end of the fiscal year, follows:

Epicenter Laundry Unadjusted Trial Balance June 30, 2018
	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
Common Stock...................................................		40,000
Retained Earnings................................................		65,600
Dividends.......................................................	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, 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 retained earnings statement, and a balance sheet.

6. Journalize and post the closing entries. Identify the closing entries by “Clos.”

7. Prepare a post-closing trial balance.