Question

In: Accounting

Adjusting Entries from Trial Balances The accountant for Eva’s Laundry prepared the following unadjusted and adjusted...

Adjusting Entries from Trial Balances

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
Trial Balance
May 31, 2019
Unadjusted Adjusted
Debit
Balances
Credit
Balances
Debit
Balances
Credit
Balances
Cash 7,530 7,530
Accounts Receivable 18,280 21,940
Laundry Supplies 3,660 5,380
Prepaid Insurance* 5,210 1,410
Laundry Equipment 196,010 189,980
Accumulated Depreciation—Laundry Equipment 48,200 48,200
Accounts Payable 9,640 9,640
Wages Payable 1,210
Eva Baldwin, Capital 110,800 110,800
Eva Baldwin, Drawing 28,800 28,800
Laundry Revenue 187,800 187,800
Wages Expense 49,420 49,420
Rent Expense 25,710 25,710
Utilities Expense 18,610 18,610
Depreciation Expense 6,030
Laundry Supplies Expense 1,720
Insurance Expense 800
Miscellaneous Expense 3,210 3,210
356,440 356,440 360,540 357,650

*3,800 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
Accounts Receivable
Laundry Supplies
Prepaid Insurance
Laundry Equipment
Accumulated Depreciation-Laundry Equipment
Accounts Payable
Wages Payable
Eva Baldwin, Capital
Eva Baldwin, Drawing
Laundry Revenue
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Laundry Supplies Expense
Insurance Expense
Miscellaneous Expense

Solutions

Expert Solution

--Corrected Trial Balance- Adjusted

Trial Balance
May 31, 2019
Accounts title Debit Credit
Cash $7,530
Accounts Receivable $21,940
Laundry Supplies $1,940
Prepaid Insurance* $1,410
Laundry Equipment $196,010
Accumulated Depreciation—Laundry Equipment $54,230
Accounts Payable $9,640
Wages Payable $1,210
Eva Baldwin, Capital $110,800
Eva Baldwin, Drawing $28,800
Laundry Revenue $191,460
Wages Expense $50,630
Rent Expense $25,710
Utilities Expense $18,610
Depreciation Expense $6,030
Laundry Supplies Expense $1,720
Insurance Expense $3,800
Miscellaneous Expense $3,210
TOTAL $367,340 $367,340

--Workings

Unadjusted Adjusted
Debit Credit Debit Credit
Balances Balances Balances Balances Increase in Debit Side Increase in Credit Side
Cash 7530 7530 0
Accounts Receivable 18280 21940 3660
Laundry Supplies 3660 5380 1720
Prepaid Insurance* 5210 1410 -3800
Laundry Equipment 196010 189980 -6030
Accumulated Depreciation—Laundry Equipment 48200 48200 0
Accounts Payable 9640 9640 0
Wages Payable 1210 1210
Eva Baldwin, Capital 110800 110800 0
Eva Baldwin, Drawing 28800 28800 0
Laundry Revenue 187800 187800 0
Wages Expense 49420 49420 0
Rent Expense 25710 25710 0
Utilities Expense 18610 18610 0
Depreciation Expense 6030 6030
Laundry Supplies Expense 1720 1720
Insurance Expense 800 800
Miscellaneous Expense 3210 3210 0
356440 356440 360540 357650
Trial Balance
May 31, 2019
Accounts title Debit Credit
Cash 7530
Accounts Receivable 21940
Laundry Supplies =3660-1720
Prepaid Insurance* 1410
Laundry Equipment 196010
Accumulated Depreciation—Laundry Equipment =48200+6030
Accounts Payable 9640
Wages Payable 1210
Eva Baldwin, Capital 110800
Eva Baldwin, Drawing 28800
Laundry Revenue =187800+3660
Wages Expense =49420+1210
Rent Expense 25710
Utilities Expense 18610
Depreciation Expense 6030
Laundry Supplies Expense 1720
Insurance Expense 3800
Miscellaneous Expense 3210
TOTAL TOTAL TOTAL

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