1. Chapter 5 The Expanded Ledger
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

2. The Expanded Ledger This tutorial guides you through the expanded ledger system. Up to Chapter 4, only the capital account is used for owner’s equity. In Chapter 5, you learn that there are several other equity accounts. For more detailed instructions, refer to Section 5.1 of the Accounting 1 textbook.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

3. The Expanded Ledger In the old Chapter 4 system, there is only a single equity account.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

4. The Expanded Ledger The Chapter 5 ledger expands upon the old version.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

5. The Expanded Ledger The Chapter 5 ledger expands upon the old version.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

6. The Expanded Ledger To begin expanding the ledger, extract the beginning capital amount.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

7. The Expanded Ledger To begin expanding the ledger, extract the beginning capital amount.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

8. The Expanded Ledger Next, extract drawings (withdrawals of money from the company for personal use).
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

9. The Expanded Ledger Next, extract drawings (withdrawals of money from the company for personal use).
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

10. The Expanded Ledger Extract the revenue amounts (known as “fees earned” if the company sells a service, or “sales” if the company sells a product).
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

11. The Expanded Ledger Extract the revenue amounts (known as “fees earned” if the company sells a service, or “sales” if the company sells a product).
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

12. The Expanded Ledger Finally, extract the individual expense amounts into their own separate accounts.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

13. The Expanded Ledger With the expanded ledger accounts, you can create a more informative trial balance and balance sheet. You are now also able to generate an income statement.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

14. The Expanded Ledger The new trial balance shows the expanded equity accounts. It is possible to determine net income and the balance of capital using the balances of these accounts.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

15. The Expanded Ledger Another view of the trial balance.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

16. The Expanded Ledger Another view of the trial balance
The Expanded Ledger Another view of the trial balance. The expanded ledger accounts can be used to generate the income statement.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

17. The Expanded Ledger Another view of the trial balance
The Expanded Ledger Another view of the trial balance. The expanded ledger accounts can be used to generate the income statement.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

18. The Expanded Ledger Another view of the trial balance
The Expanded Ledger Another view of the trial balance. The expanded ledger accounts can be used to generate the income statement.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

19. The Expanded Ledger The income statement consists of all revenue and expense accounts, which are part of the expanded ledger.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

20. The Expanded Ledger The expanded ledger also makes the balance sheet more informative.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

21. The Expanded Ledger Asset and liability accounts remain unchanged.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

22. The Expanded Ledger Owner’s equity accounts are expanded.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

23. The Expanded Ledger The new calculation looks at beginning capital, plus net income, less drawings, plus increase in capital.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition

24. The Expanded Ledger Once you have calculated the total owner’s equity you can rule and total and complete the balance sheet.
Chapter 5 – The Expanded Ledger l DRAFT | Accounting 1, 7th Edition