1. Completing the Accounting Cycle
Chapter 4

2. Learning Objectives
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.
Prepare closing entries.
Describe the accounting cycle.
Illustrate the accounting cycle for one period.

3. Learning Objectives
Explain what is meant by the fiscal year and the natural business
Describe and illustrate the use of working capital and the current ratio in evaluating a company’s financial condition.
Explain what is meant by the fiscal year and the natural business year.

4. Learning Objective 1
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.

5. Flow of Accounting Information

6. Flow of Accounting Information
End-of-Period Spreadsheet (Work Sheet)
Unadjusted TB
Adjustments
Adjusted TB
Accounts Dr Cr Dr Cr Dr Cr
Account balances are listed in the Unadjusted Trial Balance column using the ending balances found in the general ledger.
(continued)

7. Flow of Accounting Information
End-of-Period Spreadsheet (Work Sheet)
Unadjusted TB
Adjustments
Adjusted TB
Accounts Dr Cr Dr Cr Dr Cr
Adjustments are entered here. Two possibilities:
Deferrals – Existing balances are changed
Accruals – New information is entered
(continued)

8. Flow of Accounting Information
End-of-Period Spreadsheet (Work Sheet)
Unadjusted TB
Adjustments
Adjusted TB
Accounts Dr Cr Dr Cr Dr Cr
Adjustments are combined with the unadjusted trial balance amounts. Account balances are now adjusted.
(continued)

9. Flow of Accounting Information
End-of-Period Spreadsheet (Work Sheet)
Adjusted TB
Income State.
Balance Sheet
Accounts Dr Cr Dr Cr Dr Cr
Revenue and expense balances in the Adjusted Trial Balance column are extended to the Income Statement column.
(continued)

10. Flow of Accounting Information
End-of-Period Spreadsheet (Work Sheet)
Adjusted TB
Income State.
Balance Sheet
Accounts Dr Cr Dr Cr Dr Cr
Asset, liability, owner’s equity, and drawing balances in the Adjusted Trial Balance column are extended to the Balance Sheet column.
(concluded)

11. EE 4-1

12. Learning Objective 2
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.

13. LO 2
Income Statement
The income statement is prepared directly from the Income Statement or Adjusted Trial Balance columns of the end-of-period spreadsheet (work sheet) beginning with fees earned of $16,840.

14. LO 2
Financial Statement Preparation from End-of-Period Spreadsheet – Income Statement
to statement of owner’s equity

15. Statement of Owner’s Equity
LO 2
Statement of Owner’s Equity
The first item presented on the statement of owner’s equity is the balance of the owner’s capital account at the beginning of the period.

16. LO 2 from the income statement to the balance sheet
Financial Statement Preparation from End-of-Period Spreadsheet – Statement of Owner’s Equity
from the income statement
to the balance sheet

17. EE 4-2

18. LO 2
Balance Sheet
The balance sheet is prepared directly from the Balance Sheet or Adjusted Trial Balance columns of the end-of-period spreadsheet (or work sheet), beginning with Cash of $2,065.

19. from the statement of owner’s equity
LO 2
Financial Statement Preparation from End-of-Period Spreadsheet – Balance Sheet
from the statement of owner’s equity

20. Classified Balance Sheet
LO 2
Classified Balance Sheet
A classified balance sheet is a balance sheet that was expanded by adding subsections for current assets; property, plant, and equipment; current liabilities; and long-term liabilities.

21. LO 2
Current Assets
Cash and other assets that are expected to be converted into cash, sold, or used up usually within a year or less, through the normal operations of the business, are called current assets.
Cash
Accounts Receivable
Notes Receivable
Supplies

22. LO 2
Notes Receivable
Notes receivable are written promises by the customer to pay the amount of the note and possibly interest at an agreed rate.

23. LO 2
Fixed Assets
Property, plant, and equipment (also called fixed assets or plant assets) include assets that depreciate over a period of time. Land is an exception, as it is not subject to depreciation.
Equipment
Machinery
Buildings
Land

24. LO 2
Current Liabilities
Liabilities that will be due within a short time (usually one year or less) and that are to be paid out of current assets are called current liabilities.
Accounts payable
Wages payable
Interest payable
Unearned fees

25. Long-Term Liabilities
Liabilities not due for a long time (usually more than one year) are called long-term liabilities.
Long-term notes payable
Mortgage payable
Bond payable

26. LO 2
Owner’s Equity
Owner’s equity is the owner’s right to the assets of the business. Owner’s equity is added to the total liabilities, and this total must be equal to the total assets.

27. EE 4-3

28. Learning Objective 3
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.
Prepare closing entries.

29. LO 3
Closing Entries
Accounts that are relatively permanent from year to year are called permanent accounts or real accounts. These accounts are carried forward from year to year.

30. LO 3
Closing Entries
Accounts that report amounts for only one period are called temporary accounts or nominal accounts. Temporary accounts are not carried forward because they relate to only one period.

31. LO 3
Closing Entries
To report amounts for only one period, temporary accounts should have zero balances at the beginning of the next period.
To achieve this, the revenue and expense account balances are transferred to Income Summary at the end of the period.

32. The entries that transfer these balances are called closing entries.
The balance of Income Summary (net income or net loss) is then transferred to the owner’s capital account.
The balance of the owner’s drawing account is also transferred to the owner’s capital account.
The entries that transfer these balances are called closing entries.

33. LO 3
Closing Entries

34. LO 3
Closing Entries
Income Summary is a temporary account that is only used during the closing process.
At the end of the closing process, the Income Summary account will have a zero balance.
Income Summary is sometimes called a clearing account.

35. Journalizing and Posting Closing Entries

36. LO 3
Journalizing and Posting Closing Entries

37. LO 3
Journalizing and Posting Closing Entries

38. LO 3
Journalizing and Posting Closing Entries

39. LO 3
Closing Entries
Step 1
Step 2
Step 3
Step 4

40. Temporary Account Balances
LO 3
Temporary Account Balances
After the closing entries are posted, all of the temporary accounts have zero balances.

41. LO 3
Ledger
(continued)

42. LO 3
LO 3
Ledger
(continued)

43. LO 3
LO 3
Ledger
(continued)

44. LO 3
LO 3
Ledger
(continued)

45. LO 3
LO 3
Ledger
(continued)

46. LO 3
LO 3
Ledger
(concluded)

47. EE 4-4

48. EE 4-4

49. Post-Closing Trial Balance
A post-closing trial balance is prepared after the closing entries have been posted. The purpose of the post-closing (after closing) trial balance is to verify that the ledger is in balance at the beginning of the next period.

50. Post-Closing Trial Balance

51. Learning Objective 4
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.
Prepare closing entries.
Describe the accounting cycle.

52. LO 4
Accounting Cycle
The accounting process that begins with analyzing and journalizing transactions and ends with preparing the accounting records for the next period’s transactions is called the accounting cycle. There are ten steps in the accounting cycle.

53. Transactions are analyzed and recorded in the journal.
LO 4
Accounting Cycle
Transactions are analyzed and recorded in the journal.
Transactions are posted to the ledger.
An unadjusted trial balance is prepared.
Adjustment data are assembled and analyzed.
An optional end-of-period spreadsheet (work sheet) is prepared.
(continued)

54. Adjusting entries are journalized and posted to the ledger.
LO 4
Accounting Cycle
Adjusting entries are journalized and posted to the ledger.
An adjusted trial balance is prepared.
Financial statements are prepared.
Closing entries are journalized and posted to the ledger.
A post-closing trial balance is prepared.

55. to the financial statements
LO 4
Accounting Cycle
to the financial statements

56. From the adjusted trial balance
LO 4
Accounting Cycle
From the adjusted trial balance

57. EE 4-5

58. Learning Objective 5
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.
Prepare closing entries.
Describe the accounting cycle.
Illustrate the accounting cycle for one period.

59. LO 5
Accounting Cycle
Kelly Consulting
(continued)

60. LO 5
Accounting Cycle
Kelly Consulting
(continued)

61. LO 5
Accounting Cycle
Kelly Consulting
(concluded)

62. LO 5
Accounting Cycle
Kelly Consulting

63. Unadjusted Trial Balance
LO 5
Unadjusted Trial Balance
Kelly Consulting

64. End-of-Period Spreadsheet
LO 5
End-of-Period Spreadsheet
Kelly Consulting

65. LO 5
Adjusting Entries
Kelly Consulting

66. Adjusted Trial Balance
LO 5
Adjusted Trial Balance
Kelly Consulting

67. LO 5
Income Statement
Kelly Consulting
(continued)

68. Statement of Owner’s Equity
LO 5
Statement of Owner’s Equity
Kelly Consulting
Financial Statements, Kelly Consulting
(continued)

69. LO 5
Balance Sheet
Kelly Consulting
(concluded)

70. LO 5
Closing Entries
Kelly Consulting

71. Post-Closing Trial Balance
Kelly Consulting

72. LO 5
Ledger
Kelly Consulting
(continued)

73. LO 5
(continued)

74. LO 5
LO 5
Ledger
Kelly Consulting
(concluded)
(continued)

75. LO 5
LO 5
LO 5
Ledger
Kelly Consulting
(concluded)
(concluded)

76. Learning Objective 6
Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.
Prepare financial statements from adjusted account balances.
Prepare closing entries.
Describe the accounting cycle.
Illustrate the accounting cycle for one period.
Explain what is meant by the fiscal year and the natural business year.

77. LO 6
Accounting Period
The annual accounting period adopted by a business is known as its fiscal year.
When a business adopts a fiscal year that ends when business activities have reached the lowest point in its annual operation, such a fiscal year is also called the natural business year.

78. LO 6
Accounting Period

79. Financial History of a Business
LO 6
Financial History of a Business

80. Learning Objective 7
6. Explain what is meant by the fiscal year and the natural business year.
7. Describe and illustrate the use of working capital and the current ratio in evaluating a company’s financial condition.

81. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
The ability to convert assets into cash is called liquidity.

82. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
The ability of a business to pay its debts is called solvency.

83. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
Working capital is the excess of the current assets of a business over its current liabilities.

84. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
NetSolutions’ working capital at the end of 2011 is $6,355 as computed below. This amount of working capital implies that NetSolutions is able to pay its current liabilities.
Working Capital = Current Assets – Current liabilities
= $7,745 – $1,390
= $6,355

85. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
The current ratio is another means of expressing the relationship between current assets and current liabilities. The current ratio is computed by dividing current assets by current liabilities.

86. Working Capital and Current Ratio
LO 7
Working Capital and Current Ratio
The current ratio for NetSolutions at the end of 2011 is 5.6, computed as follows:
Current Ratio =
Current Assets
Current Liabilities =
$7,745
$1,390
= (rounded)

87. EE 4-6

88. Appendix: End-of-Period Spreadsheet

89. The unadjusted trial balance is checked for equality.
Trial Balance Adjustments Trial Balance
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
The unadjusted trial balance is checked for equality.

90. Supplies needs adjusting
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
Supplies needs adjusting

91. (a) Cost of supplies on hand at December 31 is $760.
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(a) 1,240
(a) Cost of supplies on hand at December 31 is $760.
(a) 1,240

92. (b) The insurance expense for December is $200 ($2,400 ÷ 12).
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(a) 1,240
(b)
(b) The insurance expense for December is $200 ($2,400 ÷ 12).
(a) 1,240
(b)

93. (c) Rent revenue earned during December was $120 ($360 ÷ 3).
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(a) 1,240
(b)
(c) Rent revenue earned during December was $120 ($360 ÷ 3).
(c)
(c)
(a) 1,240
(b)

94. Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(d)
(a) 1,240
(b)
(d) Fees accrued at the end of December, but not recorded, totaled $500.
(c)
(d)
(c)
(a) 1,240
(b)

95. (e) Wages accrued, but not paid, at the end of December totaled $250.
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(d)
(a) 1,240
(b)
(e) Wages accrued, but not paid, at the end of December totaled $250.
(e)
(c)
(d)
(c)
(e)
(a) 1,240
(b)

96. (f) Depreciation of office equipment is $50 for December.
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(d)
(a) 1,240
(b)
(f) Depreciation of office equipment is $50 for December.
(f)
(e)
(c)
(d)
(c)
(e)
(f)
(a) 1,240
(b)

97. Summed and ruled Cash 2,065 Accounts Receivable 2,220 Supplies 2,000
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2,065
Accounts Receivable 2,220
Supplies 2,000
Prepaid Insurance 2,400
Land 20,000
Office Equipment 1,800
Accumulated Depr.
Accounts Payable 900
Wages Payable
Unearned Rent 360
Chris Clark, Capital 25, Chris Clark, Drawing 4,000
Fees Earned 16,340
Rent Revenue
Wages Expense 4,275
Rent Expense 1,600
Depreciation Expense
Utilities Expense 985
Supplies Expense 800
Insurance Expense
Miscellaneous Exp. 455
42,600 42,600
(d)
(a) 1,240
(b)
(f)
(e)
(c)
(d)
(c)
(e)
(f)
(a) 1,240
(b)
Summed and ruled
2,360
2,360

98. Add / Subtract Adjustments
The next step is to add or subtract the adjustments to (or from) the amounts found in the Unadjusted Trial Balance columns and enter the results in the Adjusted Trial Balance columns.

99. Chris Clark, Capital 25,000 25,000 Chris Clark, Drawing 4,000 4,000
Trial Balance Adjustments Trial Balance
Unadjusted
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2, ,065
Accounts Receivable 2, ,720
Supplies 2,
Prepaid Insurance 2, ,200
Land 20, ,000
Office Equipment 1, ,800
Accumulated Depr
Accounts Payable
Wages Payable
Unearned Rent
Chris Clark, Capital 25, ,000 Chris Clark, Drawing 4, ,000
Fees Earned 16, ,840
Rent Revenue
Wages Expense 4, ,525
Rent Expense 1, ,600
Depreciation Expense
Utilities Expense
Supplies Expense ,040
Insurance Expense
Miscellaneous Exp
42,600 42, ,400 43,400
(d)
(a) 1,240
(b)
(f)
(e)
(c)
(d)
(c)
(e)
(f)
(a) 1,240
(b)
2,360
2,360

100. Spreadsheet
Preparing the work sheet as a spreadsheet allows the computer to assist you in the process. The spreadsheet illustrated in Exhibit 1 has been reproduced on the next slide.

102. Extending Amounts to Statement Columns
The next step is to extend amounts in the Adjusted Trial Balance columns to the Income Statement and Balance Sheet columns. Because of space limitations, the unadjusted trial balance and the adjustments columns have been removed for the remainder of this slide presentation.

103. Chris Clark, Capital 25,000 25,000 Chris Clark, Drawing 4,000 4,000
Trial Balance Income Statement Balance Sheet
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2, ,065
Accounts Receivable 2, ,720
Supplies
Prepaid Insurance 2, ,200
Land 20, ,000
Office Equipment 1, ,800
Accumulated Depr
Accounts Payable
Wages Payable
Unearned Rent
Chris Clark, Capital 25, ,000 Chris Clark, Drawing 4, ,000
Fees Earned 16, ,840
Rent Revenue
Wages Expense 4,525 4,525
Rent Expense 1,600 1,600
Depreciation Expense
Utilities Expense
Supplies Expense 2,040 2,040
Insurance Expense
Miscellaneous Exp
43,400 43,400

104. The four columns are summed.
Trial Balance Income Statement Balance Sheet
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2, ,065
Accounts Receivable 2, ,720
Supplies
Prepaid Insurance 2, ,200
Land 20, ,000
Office Equipment 1, ,800
Accumulated Depr
Accounts Payable
Wages Payable
Unearned Rent
Chris Clark, Capital 25, ,000 Chris Clark, Drawing 4, ,000
Fees Earned 16, ,840
Rent Revenue
Wages Expense 4,525 4,525
Rent Expense 1,600 1,600
Depreciation Expense
Utilities Expense
Supplies Expense 2,040 2,040
Insurance Expense
Miscellaneous Exp
43,400 43,400 9,855 16,960 33,545 26,440
The four columns are summed.

105. Determining Net Income (Net Loss)
Income Statement Balance Sheet
9,855 16,960 33,545 26,440
7, ,105
16,960 16,960 33,545 33,545
Net Income
The difference between the Income Statement column totals is net income (or net loss) for the period.

106. Chris Clark, Capital 25,000 25,000 Chris Clark, Drawing 4,000 4,000
Trial Balance Income Statement Balance Sheet
Adjusted
Account Title Debit Credit Debit Credit Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Cash 2, ,065
Accounts Receivable 2, ,720
Supplies
Prepaid Insurance 2, ,200
Land 20, ,000
Office Equipment 1, ,800
Accumulated Depr
Accounts Payable
Wages Payable
Unearned Rent
Chris Clark, Capital 25, ,000 Chris Clark, Drawing 4, ,000
Fees Earned 16, ,840
Rent Revenue
Wages Expense 4,525 4,525
Rent Expense 1,600 1,600
Depreciation Expense
Utilities Expense
Supplies Expense 2,040 2,040
Insurance Expense
Miscellaneous Exp
43,400 43,400 9,855 16,960 33,545 26,440
Net income 7, ,105
16,960 16,960 33,545 33,545

107. Completing the Accounting Cycle
The End