PR 4-3B T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet (work sheet)

The unadjusted trial balance of Laundry Basket at January 31, 2012, the end of the current fiscal year, is shown below.

Laundry Basket
Unadjusted Trial Balance
January 31, 2012
	Debit	Credit
	Balances	Balances
Cash	3,480
Laundry Supplies	9,000
Prepaid Insurance	5,760
Laundry Equipment	130,800
Accumulated Depreciation		49,200
Accounts Payable		7,440
Stacy Martinell, Capital		45,360
Stacy Martinell, Drawing	2,400
Laundry Revenue		198,000
Wages Expense	85,800
Rent Expense	43,200
Utilities Expense	16,320
Miscellaneous Expense	3,240
	300,000	300,000

The data needed to determine year-end adjustments are as follows:

a. Wages accrued but not paid at January 31 are $900.

b. Depreciation of equipment during the year is $7,000.

c. Laundry supplies on hand at January 31 are $2,100.

d. Insurance premiums expired during the year are $4,000.

Instructions

1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Jan. 31 Bal.” In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary.

2. Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet. Add the accounts listed in part (1) as needed.

3. Journalize and post the adjusting entries. Identify the adjustments by “Adj.” and the new balances as “Adj. Bal.”

4. Prepare an adjusted trial balance.

5. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.

6. Journalize and post the closing entries. Identify the closing entries by “Clos.”

7. Prepare a post-closing trial balance.