Question

The unadjusted trial balance of Epicenter Laundry at June 30, 2019, the end of the fiscal year, follows:

Epicenter Laundry

UNADJUSTED TRIAL BALANCE

June 30, 2019

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	11,000.00
2	Laundry Supplies	21,500.00
3	Prepaid Insurance	9,600.00
4	Laundry Equipment	232,600.00
5	Accumulated Depreciation		125,400.00
6	Accounts Payable		11,800.00
7	Sophie Perez, Capital		105,600.00
8	Sophie Perez, Drawing	10,000.00
9	Laundry Revenue		232,200.00
10	Wages Expense	125,200.00
11	Rent Expense	40,000.00
12	Utilities Expense	19,700.00
13	Miscellaneous Expense	5,400.00
14	Totals	475,000.00	475,000.00

The data needed to determine year-end adjustments are as follows:

•	Laundry supplies on hand at June 30 are $3,600.
•	Insurance premiums expired during the year are $5,700.
•	Depreciation of laundry equipment during the year is $6,500.
•	Wages accrued but not paid at June 30 are $1,100.

Required:

1.	For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Bal.”
2.	(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the work sheet.
3.	a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. b. Post the adjusting entries. In the T accounts, identify the adjustments by “Adj.” and the new balances as “Adj. Bal.” (Be sure to add a posting reference to the journal.)
4.	Prepare an adjusted trial balance.
5.	Prepare an income statement, a statement of owner’s equity, and a balance sheet.*
6.	a. Journalize the closing entries on page 11 of the journal. b. Post the closing entries. In the T accounts, identify the closing entries by “Clos.” (Be sure to add a posting reference to the journal.)
7.	Prepare a post-closing trial balance. *Be sure to read the instructions for each financial statement carefully. CHART OF ACCOUNTSEpicenter LaundryGeneral Ledger ASSETS 11 Cash 13 Laundry Supplies 14 Prepaid Insurance 16 Laundry Equipment 17 Accumulated Depreciation LIABILITIES 21 Accounts Payable 22 Wages Payable EQUITY 31 Sophie Perez, Capital 32 Sophie Perez, Drawing 33 Income Summary REVENUE 41 Laundry Revenue EXPENSES 51 Wages Expense 52 Rent Expense 53 Utilities Expense 54 Laundry Supplies Expense 55 Depreciation Expense 56 Insurance Expense 59 Miscellaneous Expense Labels Current assets Current liabilities Expenses For the Year Ended June 30, 2019 June 30, 2019 Property, plant, and equipment Revenues Amount Descriptions Decrease in owner’s equity Increase in owner’s equity Net income Net loss Sophie Perez, capital, June 30, 2019 Sophie Perez, capital, July 1, 2018 Total assets Total current assets Total expenses Total liabilities Total liabilities and owner’s equity Total property, plant, and equipment Withdrawals 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate T account. Identify the balance as “Bal.” 3.b. Post the adjusting entries. Identify the adjustments by “Adj.” and the new balances as “Adj. Bal.” 6.b. Post the closing entries. In the T accounts, identify the closing entries by “Clos.” (Be sure to add a posting reference to the journal.) Cash (Acct. 11) Bal. Laundry Supplies (Acct. 13) Bal. Adj. Adj. Bal. Prepaid Insurance (Acct. 14) Bal. Adj. Adj. Bal. Laundry Equipment (Acct. 16) Bal. Accumulated Depreciation (Acct. 17) Bal. Adj. Adj. Bal. Accounts Payable (Acct. 21) Bal. Wages Payable (Acct. 22) Adj. Sophie Perez, Capital (Acct. 31) Clos. Bal. Clos. Bal. Sophie Perez, Drawing (Acct. 32) Bal. Clos. Laundry Revenue (Acct. 41) Clos. Bal. Wages Expense (Acct. 51) Bal. Clos. Adj. Adj. Bal. Rent Expense (Acct. 52) Bal. Clos. Utilities Expense (Acct. 53) Bal. Clos. Laundry Supplies Expense (Acct. 54) Adj. Clos. Depreciation Expense (Acct. 55) Adj. Clos. Insurance Expense (Acct. 56) Adj. Clos. Miscellaneous Expense (Acct. 59) Bal. Clos. 3.a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. 6.a. Journalize the closing entries on page 11 of the journal. (Note: Complete the adjusted trial balance, the income statement, the statement of owner’s equity, and the balance sheet BEFORE completing part 6. a.) Question not attempted. PAGE 10PAGE 11 JOURNAL ACCOUNTING EQUATION Score: 0/260 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 4 5 6 7 8 9 4. Prepare an adjusted trial balance. Question not attempted. Epicenter Laundry ADJUSTED TRIAL BALANCE Score: 0/71 June 30, 2019 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Laundry Supplies 3 Prepaid Insurance 4 Laundry Equipment 5 Accumulated Depreciation 6 Accounts Payable 7 Wages Payable 8 Sophie Perez, Capital 9 Sophie Perez, Drawing 10 Laundry Revenue 11 Wages Expense 12 Rent Expense 13 Utilities Expense 14 Laundry Supplies Expense 15 Depreciation Expense 16 Insurance Expense 17 Miscellaneous Expense 18 Totals 5. Prepare an income statement for the year ended June 30, 2019. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Question not attempted. Score: 0/98 Epicenter Laundry Income Statement 1 2 3 4 5 6 7 8 9 10 11 5. Prepare a statement of owner’s equity for the year ended June 30, 2019. No additional investments were made during the year. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Question not attempted. Score: 0/54 Epicenter Laundry Statement of Owner’s Equity 1 2 3 4 5 5. Prepare a balance sheet as of June 30, 2019. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Question not attempted. Score: 0/119 Epicenter Laundry Balance Sheet 1 Assets 2 3 4 5 6 7 8 9 10 11 12 Liabilities 13 14 15 16 17 Owner’s equity 18 19 7. Prepare a post-closing trial balance. Question not attempted. Epicenter Laundry POST-CLOSING TRIAL BALANCE Score: 0/35 June 30, 2019 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Laundry Supplies 3 Prepaid Insurance 4 Laundry Equipment 5 Accumulated Depreciation 6 Accounts Payable 7 Wages Payable 8 Sophie Perez, Capital 9 Totals

Answer 1

• All working forms part of the answer
• Adjusting Entries

DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2	Laundry Supplies expenses		$                   17,900.00				$ (17,900.00)
3	Laundry Supplies			$               17,900.00	$           (17,900.00)
4	Insurance expenses		$                      5,700.00				$     (5,700.00)
5	Prepaid Insurance			$                 5,700.00	$              (5,700.00)
6	Depreciation Expense		$                      6,500.00				$     (6,500.00)
7	Accumulated Depreciation			$                 6,500.00	$              (6,500.00)
8	Wages Expense		$                      1,100.00				$     (1,100.00)
9	Wages payable			$                 1,100.00		$    1,100.00

• Complete T Accounts:

Cash (Acct. 11)
Bal.	$                                         11,000.00
Laundry Supplies (Acct. 13)
Bal.	$                                         21,500.00	Adj.	$            17,900.00
Adj. Bal.	$                                           3,600.00
Prepaid Insurance (Acct. 14)
Bal.	$                                           9,600.00	Adj.	$              5,700.00
Adj. Bal.	$                                           3,900.00
Laundry Equipment (Acct. 16)
Bal.	$                                     2,32,600.00
Accumulated Depreciation (Acct. 17)
		Bal.	$        1,25,400.00
		Adj.	$              6,500.00
		Adj. Bal.	$        1,31,900.00
Accounts Payable (Acct. 21)
		Bal.	$            11,800.00
Wages Payable (Acct. 22)
		Adj.	$              1,100.00
Sophie Perez, Capital (Acct. 31)
Clos.	$                                         10,000.00	Bal.	$        1,05,600.00
		Clos.	$            10,700.00
		Bal.	$        1,06,300.00
Sophie Perez, Drawing (Acct. 32)
Bal.	$                                         10,000.00	Clos.	$            10,000.00
Laundry Revenue (Acct. 41)
Clos.	$                                     2,32,200.00	Bal.	$        2,32,200.00
Wages Expense (Acct. 51)
Bal.	$                                     1,25,200.00	Clos.	$        2,52,600.00
Adj.	$                                           1,100.00
Adj. Bal.	$                                     1,26,300.00
Rent Expense (Acct. 52)
Bal.	$                                         40,000.00	Clos.	$            40,000.00
Utilities Expense (Acct. 53)
Bal.	$                                         19,700.00	Clos.	$            19,700.00
Laundry Supplies Expense (Acct. 54)
Adj.	$                                         17,900.00	Clos.	$            17,900.00
Depreciation Expense (Acct. 55)
Adj.	$                                           6,500.00	Clos.	$              6,500.00
Insurance Expense (Acct. 56)
Adj.	$                                           5,700.00	Clos.	$              5,700.00
Miscellaneous Expense (Acct. 59)
Bal.	$                                5,400.00	Clos.	$              5,400.00

• Adjusted Trial balance

June 30, 2019
	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	$             11,000.00
2	Laundry Supplies	$               3,600.00
3	Prepaid Insurance	$               3,900.00
4	Laundry Equipment	$         2,32,600.00
5	Accumulated Depreciation		$             1,31,900.00
6	Accounts Payable		$                11,800.00
7	Wages Payable		$                   1,100.00
8	Sophie Perez, Capital		$             1,05,600.00
9	Sophie Perez, Drawing	$             10,000.00
10	Laundry Revenue		$             2,32,200.00
11	Wages Expense	$         1,26,300.00
12	Rent Expense	$             40,000.00
13	Utilities Expense	$             19,700.00
14	Laundry Supplies Expense	$             17,900.00
15	Depreciation Expense	$               6,500.00
16	Insurance Expense	$               5,700.00
17	Miscellaneous Expense	$               5,400.00
18	Totals	$         4,82,600.00	$             4,82,600.00

* INCOME STATEMENT

* Statement of Owner's Equity

* Balance Sheet

• Closing Entries

DESCRIPTION	DEBIT	CREDIT
Laundry Revenue	$             2,32,200.00
Income Summary		$                2,32,200.00
(revenue account closed)
Income Summary	$             2,21,500.00
Wages Expense		$                1,26,300.00
Rent Expense		$                   40,000.00
Utilities Expense		$                   19,700.00
Laundry Supplies Expense		$                   17,900.00
Depreciation Expense		$                      6,500.00
Insurance Expense		$                      5,700.00
Miscellaneous Expense		$                      5,400.00
(expenses account closed)
Income Summary	$                 10,700.00
Sophie Perez Capital		$                   10,700.00
(Net income closed)
Sophie Perez Capital	$                 10,000.00
Sophie Perez, Drawing		$                   10,000.00
(drawings closed)

• Post Closing Trial Balance

June 30, 2019
	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	$                     11,000.00
2	Laundry Supplies	$                       3,600.00
3	Prepaid Insurance	$                       3,900.00
4	Laundry Equipment	$                 2,32,600.00
5	Accumulated Depreciation		$        1,31,900.00
6	Accounts Payable		$            11,800.00
7	Wages Payable		$              1,100.00
8	Sophie Perez, Capital		$        1,06,300.00
9	Totals	$                 2,51,100.00	$        2,51,100.00