Question

3. Journalize and post the adjusting entries. Identify the adjustments by "Adj" and the new bal- ances as "Adj. Bal." 4. Prepare an adjusted trial balance, 5. Prepare an income statement, a statement of stockholders' equity, and a balance sheet. During the year ended August 31, 2045, common stock of $3,000 was issued. 6. Journalive and post the dosing entries. Identify the closing entries by "Clos." Prepare a post-closing trial balance. 13 hp

Answer 1

3. Adjusting Journal Entries:

S.No.	Particulars	Debit	Credit
(a)	Wages Expense	2,200
	Wages Payable		2,200
	(To record wages accrued)
(b)	Depreciation Expense	8,150
	Accumulated Depreciation		8,150
	(To record depredciation expense)
(c)	Laundry Supplies Expense (9,000-2,000)	7,000
	Laundry Supplies		7,000
	(To record supplies expense)
(d)	Insurance Expense	5,300
	Prepaid Insurance		5,300
	(To record insurance expense)

4. Adjusted Trial Balance:

Particulars	Debit	Credit
Cash	3,800
Laundry Supplies	2,000
Prepaid Insurance (6,000-5,300)	700
Laundry Equipment	180,800
Accumulated Depreciation (49,200+8,150)		57,350
Accounts Payable		7,800
Wages Payable		2,200
Common Stock		15,000
Retained Earnings		80,000
Dividends	2,400
Laundry Revenue		248,000
Wages Expense (135,800+2,200)	138,000
Rent Expense	43,200
Utilities Expense	16,000
Misc. Expense	3,000
Depreciation Expense	8,150
Laundry Supplies Expense	7,000
Insurance Expense	5,300
TOTAL	410,350	410,350

5. Income Statement:

Particulars	$	$
Revenue:
Laundry Revenue		248,000
Less: Expenses:
Wages Expense	138,000
Rent Expense	43,200
Utilities Expense	16,000
Misc. Expense	3,000
Depreciation Expense	8,150
Laundry Supplies Expense	7,000
Insurance Expense	5,300
Total Expenses		220,650
Net Income		27,350

Statement of Stockholders' Equity:

Particulars	$	$
Beginning Stock	12,000
Add: Additional Issue	3,000
Less: Treasury Stock	0
Ending Common Stock		15,000
Beginning Retained Earnings	80,000
Add: Net Income	27,350
Less: Dividends	(2,400)
Ending Balance		104,950
Total Shareholders' Equity		119,950

Balance Sheet:

Particulars	$	$
ASSETS:
Cash		3,800
Laundry Supplies		2,000
Prepaid Insurance		700
Laundry Equipment	180,800
Less: Accumulated Depreciation	(57,350)	123,450
TOTAL ASSETS		129,950
LIABILITIES & EQUITY:
Accounts Payable		7,800
Wages Payable		2,200
Shareholders' Equity		119,950
TOTAL LIABILITIES & EQUITY		129,950

6. Closing Entries:

Particulars	Debit	Credit
Laundry Revenue	248,000
Income Summary		248,000
(To close revenue account)
Income Summary	220,650
Wages Expense		138,000
Rent Expense		43,200
Utilities Expense		16,000
Misc. Expense		3,000
Depreciation Expense		8,150
Laundry Supplies Expense		7,000
Insurance Expense		5,300
(To close expense accounts)
Income Summary	27,350
Retained Earnings		27,350
(To transfer net income to retained earnings)
Retained Earnings	2,400
Dividends		2,400
(To record dividends)

7. Post Closing Trial Balance:

Particulars	Debit	Credit
Cash	3,800
Laundry Supplies	2,000
Prepaid Insurance (6,000-5,300)	700
Laundry Equipment	180,800
Accumulated Depreciation (49,200+8,150)		57,350
Accounts Payable		7,800
Wages Payable		2,200
Common Stock		15,000
Retained Earnings		104,950
TOTAL	187,300	187,300