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 |
7,500.00 |
|
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
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
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.
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.