In: Accounting
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
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
7,565.00 |
|
2 |
Accounts Receivable |
18,710.00 |
|
3 |
Laundry Supplies |
3,700.00 |
|
4 |
Prepaid Insurance* |
5,655.00 |
|
5 |
Laundry Equipment |
193,800.00 |
|
6 |
Accumulated Depreciation-Laundry Equipment |
47,930.00 |
|
7 |
Accounts Payable |
9,630.00 |
|
8 |
Wages Payable |
||
9 |
Eva Bruns, Capital |
114,270.00 |
|
10 |
Eva Bruns, Drawing |
29,060.00 |
|
11 |
Laundry Revenue |
183,300.00 |
|
12 |
Wages Expense |
49,385.00 |
|
13 |
Rent Expense |
25,075.00 |
|
14 |
Utilities Expense |
18,820.00 |
|
15 |
Depreciation Expense |
||
16 |
Laundry Supplies Expense |
||
17 |
Insurance Expense |
||
18 |
Miscellaneous Expense |
3,360.00 |
|
19 |
Totals |
355,130.00 |
355,130.00 |
* $3,130 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
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
7,565.00 |
|
2 |
Accounts Receivable |
23,570.00 |
|
3 |
Laundry Supplies |
6,455.00 |
|
4 |
Prepaid Insurance* |
3,700.00 |
|
5 |
Laundry Equipment |
181,125.00 |
|
6 |
Accumulated Depreciation-Laundry Equipment |
47,930.00 |
|
7 |
Accounts Payable |
9,630.00 |
|
8 |
Wages Payable |
1,245.00 |
|
9 |
Eva Bruns, Capital |
114,270.00 |
|
10 |
Eva Bruns, Drawing |
29,060.00 |
|
11 |
Laundry Revenue |
183,300.00 |
|
12 |
Wages Expense |
49,385.00 |
|
13 |
Rent Expense |
25,075.00 |
|
14 |
Utilities Expense |
18,820.00 |
|
15 |
Depreciation Expense |
12,675.00 |
|
16 |
Laundry Supplies Expense |
2,755.00 |
|
17 |
Insurance Expense |
130.00 |
|
18 |
Miscellaneous Expense |
3,360.00 |
|
19 |
Totals |
363,675.00 |
356,375.00 |
* $3,130 of insurance expired during the year.
Corrected Adjusted Trial Balance
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.
Eva's Laundry
ADJUSTED TRIAL BALANCE
May 31, 2016
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
||
2 |
Accounts Receivable |
||
3 |
Laundry Supplies |
||
4 |
Prepaid Insurance* |
||
5 |
Laundry Equipment |
||
6 |
Accumulated Depreciation-Laundry Equipment |
||
7 |
Accounts Payable |
||
8 |
Wages Payable |
||
9 |
Eva Bruns, Capital |
||
10 |
Eva Bruns, Drawing |
||
11 |
Laundry Revenue |
||
12 |
Wages Expense |
||
13 |
Rent Expense |
||
14 |
Utilities Expense |
||
15 |
Depreciation Expense |
||
16 |
Laundry Supplies Expense |
||
17 |
Insurance Expense |
||
18 |
Miscellaneous Expense |
||
19 |
Totals |
* $3,130 of insurance expired during the year.
1. The accountant debited Accounts Receivable for $5, 060 but did not credit Laundry Revenue. This adjusting entry represents accrued laundry revenue. | ||
2. The accountant debited rather than credited Laundry Supplies for $ 2,755. | ||
3. The accountant credited the prepaid insurance account for $1,955, but debited the insurance expense account for only $ 130. | ||
4. The accountant credited Laundry Equipment for the depreciation expense of $ 12,675 instead of crediting the accumulated depreciation account. | ||
5. The accountant did not debit Wages Expense for $ 1,245. The corrected adjusted trial balance is shown below. | ||
Eva’s Laundry Adjusted Trial Balance May 31, 2016 | ||
Debit Balances | Credit Balances | |
Cash | 7,565 | |
Accounts Receivable | 23,570 | |
Laundry Supplies | 945 | |
Prepaid Insurance | 3,900 | |
Laundry Equipment | 1,93,800 | |
Accumulated Depreciation — Laundry Equipment | 60,605 | |
Accounts Payable | 9,630 | |
Wages Payable | 1,245 | |
Eva Bruns Capital | 1,14,270 | |
Eva Bruns Drawings | 29,060 | |
Laundry Revenue | 1,88,360 | |
Wages Expense | 50,630 | |
Rent Expense | 25,075 | |
Utilities Expense | 18,820 | |
Depreciation Expense | 12,675 | |
Laundry Supplies Expense | 2,755 | |
Insurance Expense | 1,955 | |
Miscellaneous Expense | 3,360 | |
3,74,110 | 3,74,110 | |