The accountant for Eva’s Laundry prepared the following unadjusted and adjusted
ID: 2412628 • Letter: T
Question
The 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
UNADJUSTED TRIAL BALANCE
May 31, 2016
1
Cash
7,500.00
2
Accounts Receivable
18,250.00
3
Laundry Supplies
3,750.00
4
Prepaid Insurance*
5,200.00
5
Laundry Equipment
190,000.00
6
Accumulated Depreciation-Laundry Equipment
48,000.00
7
Accounts Payable
9,600.00
8
Wages Payable
9
Eva Bruns, Capital
110,300.00
10
Eva Bruns, Drawing
28,775.00
11
Laundry Revenue
182,100.00
12
Wages Expense
49,200.00
13
Rent Expense
25,575.00
14
Utilities Expense
18,500.00
15
Depreciation Expense
16
Laundry Supplies Expense
17
Insurance Expense
18
Miscellaneous Expense
3,250.00
19
Totals
350,000.00
350,000.00
* $3,600 of insurance expired during the year.
Identify the errors in the accountant's adjusting entries by preparing a corrected adjusted trial balance. Assume 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.
Erroneous Adjusted Trial Balance
Eva's Laundry
ADJUSTED TRIAL BALANCE
May 31, 2016
1
Cash
7,500.00
2
Accounts Receivable
23,250.00
3
Laundry Supplies
6,750.00
4
Prepaid Insurance*
1,600.00
5
Laundry Equipment
177,000.00
6
Accumulated Depreciation-Laundry Equipment
48,000.00
7
Accounts Payable
9,600.00
8
Wages Payable
1,000.00
9
Eva Bruns, Capital
110,300.00
10
Eva Bruns, Drawing
28,775.00
11
Laundry Revenue
182,100.00
12
Wages Expense
49,200.00
13
Rent Expense
25,575.00
14
Utilities Expense
18,500.00
15
Depreciation Expense
13,000.00
16
Laundry Supplies Expense
3,000.00
17
Insurance Expense
600.00
18
Miscellaneous Expense
3,250.00
19
Totals
358,000.00
351,000.00
* $3,600 of insurance expired during the year.
ACCOUNT TITLE DEBIT CREDIT1
Cash
7,500.00
2
Accounts Receivable
18,250.00
3
Laundry Supplies
3,750.00
4
Prepaid Insurance*
5,200.00
5
Laundry Equipment
190,000.00
6
Accumulated Depreciation-Laundry Equipment
48,000.00
7
Accounts Payable
9,600.00
8
Wages Payable
9
Eva Bruns, Capital
110,300.00
10
Eva Bruns, Drawing
28,775.00
11
Laundry Revenue
182,100.00
12
Wages Expense
49,200.00
13
Rent Expense
25,575.00
14
Utilities Expense
18,500.00
15
Depreciation Expense
16
Laundry Supplies Expense
17
Insurance Expense
18
Miscellaneous Expense
3,250.00
19
Totals
350,000.00
350,000.00
Explanation / Answer
ANS
EVA’S LAUNDRY
ADJUSTED TRIAL BALANCE
May 31, 2016
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
7,500.00
2
Accounts Receivable
23,250.00
3
Laundry Supplies
750.00
4
Prepaid Insurance*
1,600.00
5
Laundry Equipment
190,000.00
6
Accumulated Depreciation-Laundry Equipment
61,000.00
7
Accounts Payable
9,600.00
8
Wages Payable
1,000.00
9
Eva Bruns, Capital
110,300.00
10
Eva Bruns, Drawing
28,775.00
11
Laundry Revenue
187,100.00
12
Wages Expense
50,200.00
13
Rent Expense
25,575.00
14
Utilities Expense
18,500.00
15
Depreciation Expense
13,000.00
16
Laundry Supplies Expense
3,000.00
17
Insurance Expense
3600.00
18
Miscellaneous Expense
3,250.00
19
Totals
369,000.00
369,000.00
NOTES
1. The accountant debited Accounts Receivable for $5,000 but did not credit Laundry Revenue. This adjusting entry represents accrued laundry revenue.
2. The accountant debited rather than credited Laundry Supplies for $3,000.
3. The accountant credited the prepaid insurance account for $3,600, but debited the insurance expense account for only $600.
4. The accountant credited Laundry Equipment for the depreciation expense of $13,000, instead of crediting the accumulated depreciation account.
5. The accountant did not debit Wages Expense for $1,000.
ACCOUNT TITLE
DEBIT
CREDIT
1
Cash
7,500.00
2
Accounts Receivable
23,250.00
3
Laundry Supplies
750.00
4
Prepaid Insurance*
1,600.00
5
Laundry Equipment
190,000.00
6
Accumulated Depreciation-Laundry Equipment
61,000.00
7
Accounts Payable
9,600.00
8
Wages Payable
1,000.00
9
Eva Bruns, Capital
110,300.00
10
Eva Bruns, Drawing
28,775.00
11
Laundry Revenue
187,100.00
12
Wages Expense
50,200.00
13
Rent Expense
25,575.00
14
Utilities Expense
18,500.00
15
Depreciation Expense
13,000.00
16
Laundry Supplies Expense
3,000.00
17
Insurance Expense
3600.00
18
Miscellaneous Expense
3,250.00
19
Totals
369,000.00
369,000.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.