T Accounts, Adjusting Entries, Financial Statements, and Closing Entries; optional end-of-period spreadsheet

The unadjusted trial balance of La Mesa Laundry at August 31, 2018, the end of the fiscal year, follows:

La Mesa Laundry Unadjusted Trial Balance August 31, 2018
	Debit Balances		Credit Balances
Cash	3,800
Laundry Supplies	9,000
Prepaid Insurance	6,000
Laundry Equipment	180,800
Accumulated Depreciation			49,200
Accounts Payable			7,800
Common Stock			15,000
Retained Earnings			80,000
Dividends	2,400
Laundry Revenue			248,000
Wages Expense	135,800
Rent Expense	43,200
Utilities Expense	16,000
Miscellaneous Expense	3,000
	400,000		400,000

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

Wages accrued but not paid at August 31 are $2,200.

Depreciation of equipment during the year is $8,150.

Laundry supplies on hand at August 31 are $2,000.

Insurance premiums expired during the year are $5,300.

Required:

1. The following steps have already been done for you: Each account balance listed in the unadjusted trial balance has been entered into its T account below, with the identification Aug. 31 Bal. T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary have been added below.

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.

Date	Account	Debit	Credit
2018
a. Aug. 31	Wages Expense
	Wages Payable
b. Aug. 31	Depreciation Expense
	Accumulated Depreciation
c. Aug. 31	Laundry Supplies Expense
	Laundry Supplies
d. Aug. 31	Insurance Expense
	Prepaid Insurance

The T accounts below are used to complete the posting requirements for part 3 and 6.

Cash
Aug. 31 Bal.	3,800

Laundry Supplies
Aug. 31 Bal.	9,000	Aug. 31 Adj.
Aug. 31 Adj. Bal.

Prepaid Insurance
Aug. 31 Bal.	6,000	Aug. 31 Adj.
Aug. 31 Adj. Bal.

Laundry Equipment
Aug. 31 Bal.	180,800

Accumulated Depreciation
		Aug. 31 Bal.	49,200
		Aug. 31 Adj.
		Aug. 31 Adj. Bal.

Accounts Payable
		Aug. 31 Bal.	7,800

Wages Payable
		Aug. 31 Adj.

Common Stock
		Aug. 31 Bal.	15,000

Retained Earnings
Aug. 31 Clos.		Aug. 31 Bal.	80,000
		Aug. 31 Clos.
		Aug. 31 Bal.

Dividends
Aug. 31 Bal.	2,400	Aug. 31 Clos.

Income Summary
Aug. 31 Clos.		Aug. 31 Clos.
Aug. 31 Clos.

Laundry Revenue
Aug. 31 Clos.		Aug. 31 Bal.	248,000

Wages Expense
Aug. 31 Bal.	135,800	Aug. 31 Clos.
Aug. 31 Adj.
Aug. 31 Adj. Bal.

Rent Expense
Aug. 31 Bal.	43,200	Aug. 31 Clos.

Utilities Expense
Aug. 31 Bal.	16,000	Aug. 31 Clos.

Depreciation Expense
Aug. 31 Adj.		Aug. 31 Clos.

Laundry Supplies Expense
Aug. 31 Adj.		Aug. 31 Clos.

Insurance Expense
Aug. 31 Adj.		Aug. 31 Clos.

Miscellaneous Expense
Aug. 31 Bal.	3,000	Aug. 31 Clos.

4. Prepare an adjusted trial balance. List the accounts in order by type: Assets, Liabilities, Capital, Dividends, Revenue and Expenses. For a compound transaction, if an amount box does not require an entry, leave it blank.

La Mesa Laundry Adjusted Trial Balance August 31, 2018
	Debit Balances	Credit Balances
Cash
Laundry Supplies
Prepaid Insurance
Laundry Equipment
Accumulated Depreciation
Accounts Payable
Wages Payable
Common Stock
Retained Earnings
Dividends
Laundry Revenue
Wages Expense
Rent Expense
Utilities Expense
Depreciation Expense
Laundry Supplies Expense
Insurance Expense
Miscellaneous Expense

5. Prepare an income statement.

La Mesa Laundry Income Statement For the Year Ended August 31, 2018
Laundry revenue
Expenses:
Wages expense
Rent expense
Utilities expense
Depreciation expense
Laundry supplies expense
Insurance expense
Miscellaneous expense
Total expenses
Net income

Prepare a retained earnings statement.

La Mesa Laundry Retained Earnings Statement For the Year Ended August 31, 2018
Retained earnings, September 1, 2017
Net income
Dividends
Change in retained earnings
Retained earnings, August 31, 2018

Prepare a balance sheet.

La Mesa Laundry Balance Sheet August 31, 2018
Assets				Liabilities
Current assets:				Current liabilities:
Cash				Accounts payable
Laundry supplies				Wages payable
Prepaid insurance				Total liabilities
Total current assets
Property, plant and equipment:				Stockholders' Equity
Laundry equipment				Common stock
Accumulated depreciation				Retained earnings
Total property, plant and equipment				Total stockholders' equity
Total assets				Total liabilities and stockholders' equity

6. Journalize the closing entries. For a compound transaction, if a box does not require an entry, leave it blank. Then post the entries to the T accounts in part 3 above. Identify the closing entries by "Clos." Provide the ending balance for the Retained Earnings account, and identify it by "Bal."

Date	Account	Debit	Credit
Aug.31 Close revenues	Laundry Revenue
	Income Summary
Aug.31 Close expenses	Income Summary
	Wages Expense
	Rent Expense
	Utilities Expense
	Depreciation Expense
	Laundry Supplies Expense
	Insurance Expense
	Miscellaneous Expense
Aug.31 Close income/loss	Income Summary
	Retained Earnings
Aug.31 Close dividends	Retained Earnings
	Dividends

7. Prepare a post-closing trial balance. List the accounts in order by type: Assets, Liabilities, Capital, Dividends, Revenue and Expenses. If a box does not require an entry, leave it blank.

La Mesa Laundry Post-Closing Trial Balance August 31, 2018
	Debit Balances	Credit Balances
Cash
Laundry Supplies
Prepaid Insurance
Laundry Equipment
Accumulated Depreciation
Accounts Payable
Wages Payable
Common Stock
Retained Earnings