Loving Laurie's Laundry Corporation Chart of Accounts Ledigert Account September 30th Balance ASSETS 101 Cash $ 55,213 102 Accounts Receivable $ 192 103 Supplies $ 743 104 Prepaid Insurance $ 1,842 105 Land $ 33,355 106 Building $ 106,320 107 Accum. Depr.- Building $ 3,180 108 Equipment $ 109 Accum. Depr. - Equipment $ S 201 202 203 204 205 LIABILITIES Accounts Payable Notes Payable Salaries Payable Interest Payable Income Tax Payable on en een el 301 302 303 OWNER'S EQUITY Common Stock Retained Earnings Dividends S S 123.123 71.362 REVENUES Laundromat Revenues 401 s S S 501 502 503 504 605 506 507 508 EXPENSES Advertising E pense Depr. E pense - Bulding Depr E pense - Equipment Income Tax Expense Insurance Expense Interest Expense Seres E pense subo e penge 3021/viewContent/1933497/View Loving Laurie's Laundry Transactions 1 2. 3 On October 1, Loving Laurie decided to replace her washers and dryers. At the end of last month, she sold off all of her equipment. Many of the machines were breaking down and she was getting tired of customer complaints. She purchased 67 washers and 64 dryers from Barney's Bargain Barn. Each washer cost $1,105 and each dryer cost $888. She made a down payment of $23,456 and put the remaining balance on account. All account balances must be fully paid within 2 months. The washers and dryers have an expected lifc 6 years, a salvage value of $11,563, and will be fully depreciated using the straight-line method On October 2. Loving Laurie noticed she needed some extra supplies. She purchased $2,353 worth of supplies from Danny's Discount Depot paying cash. On October 4, Loving Laurie shovel's in the revenues literally!! She empties all of her quarters, dimes, and nickels from the washers and dryers into buckets. She loves counting coins and counted a total of 11,081 quarters, 3,948 dimes, 2,644 nickels, and 1,375 pennies!! On October 6, Loving Laurie decided to buy the land next to her business since it was so cheap She paid $17,155 for the land. She plans on using the land for additional parking space during peak washing times! On October 7. Loving Laurie received cash from some of her clients who had put their washing and drying fees on account last month. She received a total of $177 from her customers. On October 10. Loving Laurie hures Joyful Jenny. She thought she would be great for business since she is full of joy!! Her duties will include assisting customers and cleaning the machines It is expected that she will work 28 hours this month at a rate of $9.25 an hour On October 13, Loving Laurie empties her machines and counts her coins. She counted 10,738 quarters, 4,441 dimes, and 2,108 nickels. Laurie also allows some of her customers to pay later if 5 6. 10. E It is expected that she will work 28 hours this month at a rate of $9.25 an hour. On October 13, Loving Laurie empties her machines and counts her coins. She counted 10,738 quarters, 4,441 dimes, and 2,108 nickels. Laurie also allows some of her customers to pay later if they like. She uses her magic key to start the machines for these particular customers. All customers must pay their balance owed within 30 days. Laurie needs to recognize additional revenues of $444 on account. (Note: All of this information can be recognized in a single transaction) On October 16, Loving Laurie contacted Loan Shark Sally about obtaining a loan. Barney's Bargain Barn needed $44,400 of the balance due from Laurie. Therefore, Laurie got a loan from Sally in the amount of $44.400 to pay off some of her balance. The loan will be paid off in 6 equal installments due April 16th and October 16th for each of the next 3 years. Sally will charge 36% interest on the loan. Interest will be paid with each installment. (Note: there are two transactions occurring here, first recognize the loan and then pay your liability). On October 17. Loving Laurie paid Awesome Ad's $692 for flyers to hang around town. The flyers contain information about Laurie's new machines and are expected to increase her revenues by a whopping 50.77% within a year Laurie expenses this immediately. On October 19. Loving Laurie decided to pay dividends of $2,222 to stockholders. On October 20. Loving Laurie empties her machines. She counted a total of $2,888 in coins! 12. On October 21. Loving Laurie decided she needed a vacation She put signs up letting customers know that the Laundromat will be closed until October 27th. She expects to lose 1,680 quarters, 565 dimes, 710 nickels, and 200 pennies worth of business during this time. 13. On October 23, Loving Laurie realized she made a mistake. When she last recognized revenues, she accidentally recorded 215 quarters, 37 dimes, and 31 nickels that came out of her purse and not the machines. Laurie needs to correct this mistake ASAP!! 14. On October 28. Loving Laurie pays Joyful Jenny $259 cash for her excellent work Congratulations to Jenny as she earned the prestigious "Loving Laurie's Laundry Employee of the Month Award." 15. On October 30, Loving Laurie counted her coins and tallied up her revenues from customers that owed her money. She needs to recognize 18,415 quarters, 11.096 dimes, 14,152 nickels, 2,105 pennies, as well as, $141 from customers who put their washing and drying fees on account. Adjustments On October 31, you notice the following: a) You have used up one months worth of insurance (On May 1. Laurie purchased an 8-month insurance policy for $4,912). b) You need to recognize depreciation on the equipment (washers and dryers). c) You have only $1,007 worth of supplies on hand d) You need to recognize interest accumulated on the loan e) You need to recognize depreciation for the month on a building you bought last year on July 1" It has an expected life of 30 years, a $30,000 salvage value, and you use straight- line depreciation. See chart of accounts for cost information f) You have accrued salaries of $987 g) You need to recognize accrue federal income taxes of 32%. Round to the nearest dollar if needed. Hint, compute adjusted income based on all preceding information, and then determine and record income tax expense