Adjustment Process and Financial Statements

Adjustment data for Ms. Ellen's Laundry Inc. for the year ended December 31, 20Y8, are as follows:

1. Wages accrued but not paid at December 31, $2,150
2. Depreciation of equipment during the year, $12,500
3. Laundry supplies on hand at December 31, $1,500
4. Insurance premiums expired, $4,600

Instructions:

1. Record the adjustment transactions using the integrated financial statement framework. If an amount box does not require an entry, leave it blank. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

Statement of Cash Flows

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders' Equity

Cash

+

Laundry Supplies

+

Prepaid Insurance

+

Laundry Equipment

-

Accumulated Depreciation

=

Accounts Payable

+

Wages Payable

+

Common Stock

+

Retained Earnings

Balances, December 31, 20Y8

53,000

9,000

6,000

250,000

-65,000

7,000

0

50,000

196,000

December 31. (a)

(a)

December 31. (b)

(b)

December 31. (c)

(c)

December 31. (d)

(d)

Balances, December 31, 20Y8

Statement of Cash Flows

Income Statement

Operating (Revenues)

$275,000

Laundry revenue

$275,000

Financing (Common Stock)

25,000

Wages expense

-110,000

Operating (Expenses)

-200,000

Rent expense

-30,000

Investing (Equipment)

-50,000

Utilities expense

-18,000

Financing (Dividends)

-15,000

Misc. expense

-7,500

Net increase in cash

$35,000

(a). December 31

Beginning cash balance, January 1, 20Y8

18,000

(b). December 31

Ending cash balance, December 31, 20Y8

$53,000

(c). December 31

(d). December 31

$

2. Prepare an income statement for the year ended December 31, 20Y8.

Ms. Ellen's Laundry Inc.
Income Statement
For the Year Ended December 31, 20Y8
		$
Operating expenses:
	$
Total operating expenses
		$

Prepare statement of stockholders equity for the year ended December 31, 20Y8. The common stock balance as of January 1, 20Y8, was $25,000. The retained earnings balance as of January 1, 20Y8, was $101,500. If an amount box does not require an entry, leave it blank.

Ms. Ellen's Laundry Inc.
Statement of Stockholders Equity
For the Year Ended December 31, 20Y8
	Common Stock	Retained Earnings	Total
	$	$	$
	$	$	$

3. Prepare a classified balance sheet as of December 31, 20Y8.

Ms. Ellen's Laundry Inc.
Balance Sheet
December 31, 20Y8
Assets
Current assets:
	$
Total current assets		$
Property, plant, and equipment:
	$
Total assets		$
Liabilities
Current liabilities:
	$
Total liabilities		$
Stockholders' Equity
	$
Total stockholders' equity
Total liabilities and stockholders' equity		$

4. Prepare a statement of cash flows for the year ended December 31, 20Y8. Use the minus sign to indicate cash out flows, decreases in cash, or cash payments.

Ms. Ellen's Laundry Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from operating activities:
	$
		$
Cash flows from investing activities:
Cash flows from financing activities:
	$
		$
		$