1. Accounting Practices 501 Chapter 8 Adjusted Trial Balance Cathy Saenger, Senior Lecturer, Eastern Institute of Technology © Pearson 2011

2. Adjusted Trial Balance Ch8F - Adj Trial Balance 2 An adjusted trial balance shows at one glance the status of a trial balance after balance day adjustments have been done The following is an example of balance day adjustments done directly on the trial balance Each entry would have been done in the General Journal first

3. Extract from trial balance at year end - 20X2 BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 3 The above is a trial balance extract before balance day adjustments have been made

4. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 4 1. Closing inventory is $5,000 (last year’s inventories becomes this year’s opening stock) Opening inv 6000 Closing inv 5000 60005000 Extract from trial balance at year end - 20X2

5. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 5 Opening inv 6000 Closing inv 5000 60005000 2. Owner took products for own use $80 (GST excl) 80 92 GST collected12 (taken off Purchases) Extract from trial balance at year end - 20X2

6. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 6 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 3. Prepaid rent $500 500 Prepaid Rent (taken off Rent expense) Extract from trial balance at year end - 20X2

7. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 7 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 500 Prepaid Rent 4. Outstanding wages $300 Accrued wages 300 (added to Wages expense) Extract from trial balance at year end - 20X2

8. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 8 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 500 Prepaid Rent Accrued wages 300 5. Interest due but not received $100 100 Accrued Interest 100 (added to Interest income) Extract from trial balance at year end - 20X2

9. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 9 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 500 Prepaid Rent Accrued wages 300 100 Accrued Interest 100 We now calculate the adjusted trial balance after balance day adjustments 5000 7200 1500 1300 400 592 6000 5000 12 500 300 100 Extract from trial balance at year end - 20X2

10. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 10 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 500 Prepaid Rent Accrued wages 300 100 Accrued Interest 100 5000 7200 1500 1300 400 592 6000 5000 12 500 300 100 Remember that each adjustment would be a General Journal entry Extract from trial balance at year end - 20X2

11. BeforeAdjust- ments After DrCrDrCrDrCr Inventories (‘X1) 6000 Purchases8000 Rent2000 Wages1000 Interest300 Drawings500 Ch8F - Adj Trial Balance 11 Opening inv 6000 Closing inv 5000 60005000 80 92 GST collected12 500 Prepaid Rent Accrued wages 300 100 Accrued Interest 100 5000 7200 1500 1300 400 592 6000 5000 12 500 300 100 The figures from the adjusted trial balance (After) are now used to prepare the financial statements Extract from trial balance at year end - 20X2