FINANCIAL ACCOUNTING
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Transcribed Image Text:### Educational Resource: Understanding the Unadjusted Trial Balance
#### PR 4-3A: T Accounts, Adjusting Entries, Financial Statements, and Closing Entries; Optional End-of-Period Spreadsheet
The unadjusted trial balance of Epicenter Laundry as of June 30, 2016, which is the end of the fiscal year, is given below. This trial balance lists all accounts with their respective debit and credit balances before any adjustments have been made for the final financial statements.
**Epicenter Laundry**
**Unadjusted Trial Balance**
**June 30, 2016**
| Account | Debit Balances | Credit Balances |
|----------------------------|----------------|-----------------|
| Cash | 11,000 | |
| Laundry Supplies | 21,500 | |
| Prepaid Insurance | 9,600 | |
| Laundry Equipment | 232,600 | |
| Accumulated Depreciation | | 125,400 |
| Accounts Payable | | 11,800 |
| Common Stock | 10,000 | 232,200 |
| Retained Earnings | | 40,000 |
| Dividends | 125,200 | |
| Laundry Revenue | | 65,600 |
| Wages Expense | 40,000 | |
| Rent Expense | 19,700 | |
| Utilities Expense | 5,400 | |
| Miscellaneous Expense | | |
| **Totals** | **475,000** | **475,000** |
**Explanation of Key Components:**
1. **Cash, Laundry Supplies, Prepaid Insurance, Laundry Equipment, Dividends, Wages Expense, Rent Expense, Utilities Expense:** These accounts show the resources that are available and the expenses incurred by the business during the fiscal period.
2. **Accumulated Depreciation, Accounts Payable, Common Stock, Retained Earnings, Laundry Revenue:** These accounts reflect long-term asset depreciation, liabilities, equity holdings, retained earnings, and revenue generated by the business.
3. **Balancing the Trial Balance:** The totals for debit (assets and expenses) and credit (liabilities, revenues, and equity) balances both equal 475,000. This balance confirms that the trial balance is
Transcribed Image Text:### Completing the Accounting Cycle
**The data needed to determine year-end adjustments are as follows:**
- **a.** Laundry supplies on hand at June 30 are \$3,600.
- **b.** Insurance premiums expired during the year are \$5,700.
- **c.** Depreciation of laundry equipment during the year is \$6,500.
- **d.** Wages accrued but not paid at June 30 are \$1,100.
#### Instructions
1. **For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “June 30 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 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 retained earnings statement, and a balance sheet.**
6. **Journalize and post the closing entries.** Identify the closing entries by “Clos.”
7. **Prepare a post-closing trial balance.**
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