Lecture 11 Chapter 04 Completing the Accounting Cycle Task Force Image Gallery clip art included in this electronic presentation is used with the permission.

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Presentation transcript:

Lecture 11 Chapter 04 Completing the Accounting Cycle Task Force Image Gallery clip art included in this electronic presentation is used with the permission of NVTech Inc.

Lecture Overview Unadjusted Trial Balance Adjusting entries and their affect on adjustment column Adjustment of entries on Adjusted column

Cash2,065 Accounts Receivable2,220 Supplies2,000 Prepaid Insurance2,400 Land20,000 Office Equipment1,800 Accounts Payable900 Unearned Rent360 Capital Stock25,000 Dividends4,000 Fees Earned16,340 Wages Expense4,275 Rent Expense1,600 Utilities Expense985 Supplies Expense800 Miscellaneous Expense45542,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Opportunities Inc. Work Sheet For the Two Months Ended December 31, 2010

Cash2,065 Accounts Receivable2,220(e) 500 Supplies2,000(a) 1,240 Prepaid Insurance2,400(b) 100 Land20,000 Office Equipment1,800 Accounts Payable900 Unearned Rent360(c) 120 Capital Stock25,000 Dividends4,000 Fees Earned16,340(e) 500 Wages Expense4,275(d) 250 Rent Expense1,600 Utilities Expense985 Supplies Expense800(a) 1,240 Miscellaneous Expense45542,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Insurance Expense(b) 100 Rent Revenue (c) 120 Wages Payable(d) 250 Depreciation Expense(f) 50 Accum. Depreciation(f) 502,260

Cash2,0652,065 Accounts Receivable2,220(e) 5002,720 Supplies2,000(a) 1, Prepaid Insurance2,400(b) 1002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable Unearned Rent360(c) Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,340(e) 50016,840 Wages Expense4,275(d) 2504,525 Rent Expense1,6001,600 Utilities Expense Supplies Expense800(a) 1,2402,040 Miscellaneous Expense ,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Insurance Expense(b) Rent Revenue (c) Wages Payable(d) Depreciation Expense(f) 5050 Accum. Depreciation(f) ,2602,26043,40043,400

Cash2,0652,065 Accounts Receivable2,220(e) 5002,720 Supplies2,000(a) 1, Prepaid Insurance2,400(b) 1002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable Unearned Rent360(c) Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,340(e) 50016,840 Wages Expense4,275(d) 2504,525 Rent Expense1,6001,600 Utilities Expense Supplies Expense800(a) 1,2402,040 Miscellaneous Expense ,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Insurance Expense(b) Rent Revenue (c) Wages Payable(d) Depreciation Expense(f) 5050 Accum. Depreciation(f) ,2602,26043,40043,400

Revenue and expense balances in the Adjusted Trial Balance column are extended to the Income Statement column. Adjusted TB AccountsDrCrDrCrDrCr Income State.Balance Sheet

Asset, liability, and stockholders’ equity balances in the Adjusted Trial Balance column are extended to the Balance Sheet column. Adjusted TB AccountsDrCrDrCrDrCr Income State.Balance Sheet

Cash2,065 Accounts Receivable2,720 Supplies760 Prepaid Insurance2,300 Land20,000 Office Equipment1,800 Accounts Payable900 Unearned Rent240 Capital Stock25,000 Dividends4,000 Fees Earned16,840 Wages Expense4,525 Rent Expense1,600 Utilities Expense985 Supplies Expense2,040 Miscellaneous Expense455 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense100 Rent Revenue 120 Wages Payable250 Depreciation Expense50 Accum. Depreciation50 43,40043,400

Cash2,0652,065 Accounts Receivable2,7202,720 Supplies Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable Unearned Rent Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense Supplies Expense2,0402,040 Miscellaneous Expense Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense Rent Revenue Wages Payable Depreciation Expense5050 Accum. Depreciation ,40043,400

Cash2,0652,065 Accounts Receivable2,7202,720 Supplies Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable Unearned Rent Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense Supplies Expense2,0402,040 Miscellaneous Expense Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense Rent Revenue Wages Payable Depreciation Expense5050 Accum. Depreciation ,40043,400

Cash2,0652,065 Accounts Receivable2,7202,720 Supplies Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable Unearned Rent Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense Supplies Expense2,0402,040 Miscellaneous Expense Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense Rent Revenue Wages Payable Depreciation Expense5050 Accum. Depreciation ,40043,4009,75516,96033,64526,440

9,75516,96033,64526,4407,205 16,96016,96033,64533,645 Income Statement Balance Sheet Net Income

Opportunities Inc. Work Sheet For the Two Months Ended December 31, 2010 Fees earned16,840 Rent revenue120 Total revenues16,960 Expenses: Wages expense 4,525 Supplies expense2,040 Rent expense1,600 Utilities expense985 Insurance expense100 Depreciation expense50 Miscellaneous expense455 Total expenses 9,755 Net income 7,205 Every amount on this income statement was taken from the Income Statement column of the work sheet.

Opportunities Inc. Work Sheet For the Two Months Ended December 31, 2010 Net income for November and December 7,205 Less dividends 4,000 Retained earnings, December 31, 20053,205

Opportunities Inc. Work Sheet For the Two Months Ended December 31, 2010 Net income for November and December 7,205 Less dividends 4,000 Retained earnings, December 31, 20053,205

Opportunities Inc. Balance Sheet For the Two Months Ended December 31, 2010 Stockholders’ Equity

Lecture Overview Structure of Worksheet Unadjusted Trial Balance Adjusting entries and their affect on adjustment column Adjustment of entries on Adjusted column Preparation of Income Statement Column Preparation of Balance Sheet Column

End of Lecture 11