Problem - The trial balance of Dynamite Laundry at July 31, 2006, the end of the current fiscal year, and the data needed to determine year-end adjustments are as follows:
Dynamite Laundry Trial Balance July 31, 2006
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900
Laundry Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7,500
Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4,800
Laundry Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,050
Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,100
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100
David Duffy, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,800
David Duffy, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Laundry Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,000
Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71,400
Rent Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000
Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,650
Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . .2,700
250,000 250,000
a. Wages accrued but not paid at July 31 are $1,200.
b. Depreciation of equipment during the year is $6,800.
c. Laundry supplies on hand at July 31 are $1,750.
d. Insurance premiums expired during the year are $2,400.
Instructions
1. Enter the trial balance on a ten-column work sheet and complete the work sheet. Add accounts as needed.
2. Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet.
3. On the basis of the adjustment data in the work sheet, journalize the adjusting entries.
4. On the basis of the data in the work sheet, journalize the closing entries.