13. The trial balance of ABC Iaundry at October 31, 2007, the end of the current fiscal year, and the data needed to determine year- end adjustments are as follows ;
ABC Laundry
Trial balance
October 31,2007
Debit credit
Cash 9,950
Supplies 7,200
Prepaid insurance 2,750
Equipment 72,500
Accumulated-
Depreciation 37,100
Account payable 6,100
Capital 26,500
Fees revenue 151,800
Wages expense 50,150
Rent expense 36,000
Utility expense 22,250
Miscellaneous expense 2,700
221,500 221,500
Adjustment data;
A, inventory of supplies at October 31..............1,600
B, insurance premiums expired during the............. 1,800
C, depreciation on equipment during the year.............. 1,700
D, wages accrued but not paid at October 31............1,750
A, record the necessary adjusting journal entries.
B, prepare the adjusted trial balance.
C, prepare the balance sheet.
A. Adjusting Journal Entries:
1. Adjusting entry for inventory of supplies:
Supplies Expense 5,600
Supplies 5,600
2. Adjusting entry for insurance premiums expired:
Insurance Expense 1,800
Prepaid Insurance 1,800
3. Adjusting entry for depreciation on equipment:
Depreciation Expense 1,700
Accumulated Depreciation 1,700
4. Adjusting entry for accrued wages:
Wages Expense 1,750
Wages Payable 1,750
B. Adjusted Trial Balance:
Debit Credit
Cash 9,950
Supplies 1,600
Prepaid Insurance
Equipment 72,500
Accumulated Depreciation 38,800
Account Payable 6,100
Capital 26,500
Fees Revenue 151,800
Wages Expense 52,900
Rent Expense 36,000
Utility Expense 22,250
Miscellaneous Expense 2,700
Supplies Expense 5,600
Insurance Expense 1,800
Depreciation Expense 1,700
Wages Payable 1,750
Total 212,900 212,900
C. Balance Sheet:
ABC Laundry
Balance Sheet
October 31, 2007
Assets:
Cash $9,950
Supplies $1,600
Equipment $72,500
Less: Accumulated Depreciation ($38,800)
Net Equipment $33,700
Liabilities:
Account Payable $6,100
Wages Payable $1,750
Owner's Equity:
Capital $26,500
Total Liabilities and Owner's Equity $67,000