Define accumulated depreciation in accounting

he unadjusted trial balance of Epicenter Laundry at June 30, 2018, the end of the fiscal year, follows:

Epicenter Laundry
UNADJUSTED TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash11,000.00 2Laundry Supplies21,500.00 3Prepaid Insurance9,600.00 4Laundry Equipment232,600.00 5Accumulated Depreciation 125,400.006Accounts Payable 11,800.007Common Stock 40,000.008Retained Earnings 65,600.009Dividends10,000.00 10Laundry Revenue 232,200.0011Wages Expense125,200.00 12Rent Expense40,000.00 13Utilities Expense19,700.00 14Miscellaneous Expense5,400.00 15Totals475,000.00475,000.00


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.

Required:
Note: Download the spreadsheet on the T Accounts panel, saving the Excel file to your computer. Be sure to save your work in Excel. The spreadsheet input will not be included in your grade in CengageNOW on this problem.1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Bal.”2. Using the Excel spreadsheet downloaded from the T Accounts panel, click the Work Sheet tab. Enter the unadjusted trial balance on the end-of-period work sheet and complete the work sheet.3. a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. Refer to the Chart of Accounts for exact wording of account titles.3. b. Post the adjusting entries. In the T accounts, identify the adjustments by “Adj.” and the new balances as “Adj. Bal.” (Be sure to add a posting reference to the journal.)4. Prepare an adjusted trial balance.5. a. Prepare an income statement for the year ended June 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.5. b. Prepare a retained earnings statement for the year ended June 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.5. c. Prepare a balance sheet as of June 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.6. a. Journalize the closing entries on page 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Note: Complete the adjusted trial balance, the income statement, the retained earnings statement, and the balance sheet BEFORE completing part 6. a.)6. b. Post the closing entries. In the T accounts, identify the closing entries by “Clos.” (Be sure to add a posting reference to the journal.)7. Prepare a post-closing trial balance.

Chart of Accounts


CHART OF ACCOUNTSEpicenter LaundryGeneral LedgerASSETS11Cash13Laundry Supplies14Prepaid Insurance17Laundry Equipment18Accumulated Depreciation
LIABILITIES21Accounts Payable22Wages Payable
EQUITY31Common Stock32Retained Earnings33Dividends34Income SummaryREVENUE41Laundry Revenue
EXPENSES51Wages Expense52Rent Expense53Utilities Expense54Laundry Supplies Expense55Depreciation Expense56Insurance Expense59Miscellaneous Expense

Labels and Amount Descriptions


LabelsCurrent assetsCurrent liabilitiesExpensesFor the Year Ended June 30, 2018June 30, 2018Property, plant, and equipmentAmount DescriptionsChange in retained earningsNet incomeNet lossRetained earnings, June 30, 2018Retained earnings, July 1, 2017Total assetsTotal current assetsTotal expensesTotal liabilitiesTotal liabilities and stockholders’ equityTotal property, plant, and equipmentTotal stockholders’ equity

T Accounts


Note:Download the SPREADSHEET, saving the Excel file to your computer. Be sure to save your work in Excel. The spreadsheet input will not be included in your grade in CengageNOW on this problem.1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Bal.”3. b. Post the adjusting entries. In the T accounts, identify the adjustments by “Adj.” and the new balances as “Adj. Bal.”6. b. Post the closing entries. In the T accounts, identify the adjustments by “Clos.”

Work Sheet


2. Using the Excel spreadsheet downloaded from the T Accounts panel, click the Work Sheet tab. Enter the unadjusted trial balance on the end-of-period work sheet and complete the work sheet.

Journal


3. a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. Refer to the Chart of Accounts for exact wording of account titles. 6. a. Journalize the closing entries on page 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Note: Complete the adjusted trial balance, the income statement, the retained earnings statement, and the balance sheet BEFORE completing part 6. a.)
PAGE 10PAGE 11

JOURNAL
ACCOUNTING EQUATION

DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 Adjusting Entries      23456789

Adjusted Trial Balance


4. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Epicenter Laundry
ADJUSTED TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash2Laundry Supplies3Prepaid Insurance4Laundry Equipment5Accumulated Depreciation6Accounts Payable7Wages Payable8Common Stock9Retained Earnings10Dividends11Laundry Revenue12Wages Expense13Rent Expense14Utilities Expense15Laundry Supplies Expense16Depreciation Expense17Insurance Expense18Miscellaneous Expense19Totals

Income Statement



5. a. Prepare an income statement for the year ended June 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.

Epicenter LaundryIncome Statement1 2  3 4 5 6 7 8 9 10 11

Retained Earnings Statement


5. b. Prepare a retained earnings statement for the year ended June 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.

Epicenter LaundryRetained Earnings Statement1 2 3 4 5

Balance Sheet


5. c. Prepare a balance sheet as of June 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Epicenter LaundryBalance Sheet1Assets  2  3 4 5 6 7  8 9 10 11 12Liabilities  13  14 15 16 17Stockholders’ Equity  18 19 20 21

Post-closing Trial Balance


7. Prepare a post-closing trial balance.

Epicenter Laundry
POST-CLOSING TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash2Laundry Supplies3Prepaid Insurance4Laundry Equipment5Accumulated Depreciation6Accounts Payable7Wages Payable8Common Stock9Retained Earnings10Totals