P3-6 Adjustment process and financial statements Adjustment data for Magnum Therapeutics Inc. for the year ended May 31 2011, are as follows: a. Wages accrued but not paid at May 31, $1,800 b. Depreciation of equipment during the year, $12,500 c. Laundry supplies on hand at May 31, $1,900 d. Insurance premiums expired, $5,500 Objs 3, 4 SPREADSHEE 2. Net income $122,600 Instructions 1. Using the following integrated financial statement framework, record each adjustment to the appropriate accounts, identifying each adjustment by its etter. After all adjustments are recorded, determine the balances. Balance Sheet Statement of Cash Flows Liabilities Stockholders' Equity Income Assets Statement LaundryPrepaidLaundryAcc.Accts. Wages Capital Retained Cash +Supples +Insurance +Equip.Deprec.Payable + Payable + Stock +Earnings Balances, May 31, 2011 48,000 9,000 6,000 250,000 60,000 7,000 0 50,000 196,000 Statement of Cash Flows Operating (Revenues) Financing (Capital Stock) Operating (Expenses) Investing (Equipment) Financing (Dividends) Net increase in cash Beginning cash balance, June 1, 2010 13,000 Ending cash balance, May 31,2011 548000 315,000 25,000 -220,000 -80,000 5,000 35,000 Income Statement Laundry revenue 315,000 Wages expense -110,000 Rent expense Utilities expense Misc. expense -30,000 7,500 2. Prepare an income statement and retained earnings statement for the year ended May 31, 2011. The retained earnings balance as of June 1, 2010, was $51,500 3, Prepare a classified balance sheet as of May 3, 2011 4. Prepare a statement of cash flows for the year ended May 31, 2011