EX 3-27 Adjusting entries from trial balances

The accountant for E-Z Laundry prepared the following unadjusted and adjusted trial balances.
Assume that all balances in the unadjusted trial balance and the amounts of the
adjustments are correct. Identify the errors in the accountant’s adjusting entries assuming
that none of the accounts were affected by more than one adjusting entry.

E-Z Laundry

Trial Balance

July 31, 2012

                                                                     Unadjusted                             Adjusted
                                                                 Debit     Credit                      Debit     Credit
                                                                Balances Balances                Balances  Balances
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500                               7,500
Accounts Receivable. . . . . . . . . . . . . . . . .18,250                             22,000
Laundry Supplies. . . . . . . . . . . . . . . . . . . .3,750                             5,500
Prepaid Insurance* . . . . . . . . . . . . . . . . . 5,200                              1,400
Laundry Equipment . . . . . . . . . . . . . . . . .190,000                            184,000
Accumulated Depreciation—Laundry Equipment. . .   48,000                                  48,000
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . .  9,600                                  9,600
Wages Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   1,200
Myrna Lundy, Capital . . . . . . . . . . . . . . . . . . . . . . 110,300                                110,300
Myrna Lundy, Drawing. . . . . . . . . . . . . . 28,775                                      28,775
Laundry Revenue. . . . . . . . . . . . . . . . . . . . . . . 182,100                                 182,100
Wages Expense . . . . . . . . . . . . . . . . . . .49,200                                    49,200
Rent Expense . . . . . . . . . . . . . . . . . . . . .25,575                                   25,575
Utilities Expense . . . . . . . . . . . . . . . . . .18,500                                      18,500
Depreciation Expense . . . . . . . . . . . . . . . . . . . . . . .                              6,000
Laundry Supplies Expense . . . . . . . . . . . . . . . . . . . . .                          1,750
Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     800
Miscellaneous Expense . . . . . . . . . . . . .3,250                                       3,250
                                                             350,000     350,000               354,250   351,200
* 3,800 of insurance expired during the year.

Answer:
1. The accountant debited Accounts Receivable for $3,750 but did not credit Laundry Revenue. This adjusting entry represents accrued laundry revenue.
2. The accountant debited rather than credited Laundry Supplies for $1,750.
3. The accountant credited the prepaid insurance account for $3,800 but debited the insurance expense account for only $800.
4. The accountant credited Laundry Equipment for the depreciation expense of  $6,000, instead of crediting the accumulated depreciation account.
5. The accountant did not debit Wages Expense for $1,200.