Question

Adjusting Entries from Trial Balances 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 Trial Balances May 31, 2019 Unadjusted Adjusted Debit Credit Credit Balances Debit Balances Balances Balances Cash 7,500 7,500 Accounts Receivable 18,250 23,250 Laundry Supplies 3,750 6,750 Prepaid Insurance* 5,200 1,600 Laundry Equipment 190,000 177,000 Accumulated Depreciation-Laundry Equipment 48,000 48,000 Accounts Payable 9,600 9,600 Wages Payable 1,000 Common Stock 35,000 35,000 Retained Earnings 75,300 75,300 Dividends 28,775 28,775

Answer 1

Solution ;

1.The account receivable was debited for $5000 (23250 - 18250) but did not credited laundry

   revenue .

correct laundry revenue =

(Laundry revenue in trial balance) + (Difference between adjuster and unadjusted account receivable)

= 182100 + (23250 - 18250) = 187100

2. The laundry suppliers expense was debited rather than credited laundry suppliers for $3000

3. The prepaid insurance was credited for $3600(5200 - 1600) , but debited the insurance expense

   for only $600

4. Credited the laundry equipment for depreciation expense for $13,000 instead of crediting

   accumulated depreciation .

5. The wages expense was not debited for $1000

                    EVA'S LAUNDRY

                    Adjusted Trial Balance

                                        May 31 ,2019

Particulars	Debit	Credit
Cash	7500
Accounts receivable	23250
Laundry suppliers	750
Prepaid insurance	1600
Laundry equipment	190,000
Accumulated Depreciation - Laundry equipment		61,000
Accounts payable		9600
Wages payable		1000
Eva Bruns , Capital		110300
Eva Bruns , Drawing	28775
Laundry revenue		187100
Wages expense (49200+1000)	50200
Rent expense	25575
Utility expense	18500
Depreciation expense	13000
Laundry Suppliers expense	3000
Insurance expense	3600
Miscellaneous expense	3250
Total	369,000	369,000