Two years ago Abebe organized start Laundromat as a sole proprietorship. At December 31, 2016, the end
Question:
Two years ago Abebe organized start Laundromat as a sole proprietorship. At December 31, 2016, the end of current fiscal year, the trial balance of start Laundromat is as follows:
Start Laundromat
Trial Balance
December 31, 2016
Cash……………………………………………………….2,425
Laundry supplies……………………………………1,870
Prepaid insurance……………………………………..620
Laundry equipment……………………………...37,650
Accumulated depreciation…………………………………….........9,700
Account payable………………………………………………...................925
Abebe, capital…………………………………………………..............22,180
Abebe, drawing……………………………………..10,200
Laundry revenue…………………………………………………......39,125
Wage expense……………………………………….12,415
Rent expense……………………………………..........3,600
Utilities expense………………………………….......2,715
Miscellaneous expense……………………………….435
71, 93071, 930
The data needed to determine yearend adjustments are as follows:
a)Inventory of laundry supplies at December 31, 2016…………… $ 480.
b)Insurance premiums expired (used) during the year………………315.
c)Depreciation on the equipment during the year……………………1,950.
d)Wage accrued but not paid at December 31, 2016…………………140.
Instructions:
1) Record the adjusting entries
2) Prepare adjusted trial balance
3) Prepare an income statement, a statement of owner’s equity and balance sheet.
4) Record closing entries
5) Prepare post-closing trial balance
Expert Answer:
1 Adjusting entries a Inventory adjustment Debit Laundry Supplies Expense 1390 1870 480 Credit Laundry Supplies 1390 b Insurance adjustment Debit Insu... View the full answer
