Question

T Accounts, Adjusting Entries, Financial Statements, and Closing Entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows: La Mesa Laundry Unadjusted Trial Balance August 31, 2015 Cash Laundry Supplies Prepaid Insurance Laundry Equipment Accumulated Depreciation Accounts Payable Bobbi Downey, Capital Bobbi Downey, Drawing Laundry Revenue Wages Expense Rent Expense Utilities Expense Miscellaneous Expense Debit Balances Credit Balances 3,800 9,000 6,000 180,800 2,400 135,800 43,200 16,000 3,000 400,000 49,200 7,800 95,000 248,000 400,000 The data needed to determine year-end adjustments are as follows: a. Wages accrued but not paid at August 31 are $2,200. b. Depreciation of equipment during the year is $8,150. c. Laundry supplies on hand at August 31 are $2,000. d. Insurance premiums expired during the year are $5,300. Required: 1. The beginning account balances from the unadjusted trial balance, as of August 31st, have been entered in the T accounts in part 3 below. The T accounts will be used in parts 3 and 6. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 3. Journalize the adjusting entries. Then, post the entries in the T accounts below. Adjustments are identified by "Adj.", the new balances as "Adj. Bal." and closing entries as "Clos." If an amount box does not require an entry, leave it blank.

Answer 1

To adjust the La Mesa Laundry accounts, you would need to make entries for accrued wages, equipment depreciation, supplies adjustment, and expired insurance premiums. These adjustments are critical for reflecting real expenses and updating the corresponding liabilities and asset accounts, which lead to accurate financial statements. The current account balance is relevant for international transactions and unrelated to these adjustments.

Step-by-step explanation:

When journalizing adjusting entries in accounts, such as for La Mesa Laundry, we need to recognize certain transactions that have occurred but not yet been recorded prior to the preparation of financial statements. In our scenario, we have the following adjustments to make:

• Accrued wages payable of $2,200, which increases Wages Expense and creates a liability for Wages Payable.
• Equipment depreciation of $8,150, which increases Depreciation Expense and increases Accumulated Depreciation.
• An inventory count of Laundry Supplies shows $2,000 on hand, necessitating an adjustment for the used supplies.
• Insurance Expense needs to reflect the $5,300 of expired premiums.

Each of these entries involves debiting an expense account and crediting a corresponding liability or contra-asset account. After posting these to the T accounts, one would update the account balances accordingly, leading to accurate financial statements.

The current account balance would not be impacted by these adjustments, as it pertains to a nation's international transactions and is not a part of the business's financial accounting process.

Answer 2

To journalize the adjusting entries for La Mesa Laundry, we need to consider the information provided. Then, we can create the adjusting entries and post them in the appropriate T accounts.

Step-by-step explanation:

To journalize the adjusting entries for La Mesa Laundry, we need to consider the following information:

1. Wages accrued but not paid at August 31 are $2,200.
2. Depreciation of equipment during the year is $8,150.
3. Laundry supplies on hand at August 31 are $2,000.
4. Insurance premiums expired during the year are $5,300.

Using this information, we can journalize the following adjusting entries:

1. Wages Expense 2,200

Wages Payable 2,200

2. Depreciation Expense 8,150

Accumulated Depreciation 8,150

3. Supplies Expense 6,000

Laundry Supplies 6,000

4. Insurance Expense 5,300

Prepaid Insurance 5,300

These adjusting entries should be posted in the respective T accounts.