1. Preparing a worksheet Chapter 6 Section 1

2. What is the worksheet Worksheet is used for a couple of things: –Recheck our trial balance –To make adjustments to accounts –To prepare our balance sheet at the end of the year –To prepare out income statement at the end of the year –To determine our net income

3. The 6 th step of the Accounting Cycle: The work Sheet Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash Petty Cash Account Rec. - Kids Time Accounts Rec. - Learn N Play Supplies

4. Step #1 Take all of the balances from the general ledger and place them into the Trial balance columns of the worksheet.

5. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 Prepaid Insurance1200 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense Miscellaneous Expense10 Rent Expense250 Supplies Expense Utilities Expense115 Net Income 156791

6. Work on “on your own” on page 153

7. Adjustments Section 2

8. Definition of adjustment The number of things change from the beginning of the year to the end of the year. Supplies Beg------------------ Supplies End 100 10 Prepaid Insurance Beg-----PPI End 1200 1100

9. We record those changes (adjustments) in the adjustment columns. Because both of these accounts are assets. If the number goes up we Debit If it goes down we credit

10. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 Prepaid Insurance1200 100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 Net Income a a b b

11. Please work “on your own” on page 158

12. Chapter 8 Section 3 Extending Amounts Across the worksheet

13. Next step in preparing a work sheet Step 1 –After placing all of the accounts in the proper places and putting the numbers that correspond with them, and making sure that the two columns equal. Step 2 –Take the numbers and move them into the proper columns

14. Three major rules to remember Accounts that go on the Income Statement –Revenue, expenses

15. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 Prepaid Insurance1200 100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 Net Income

16. Three major rules to remember Accounts that go on the Income Statement –Revenue, expenses Accounts that go on the Balance Sheet –Assets, Liabilities, Owners Equity

17. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies 4751 2564 2187 Prepaid Insurance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 Net Income

18. Three major rules to remember Accounts that go on the Income Statement –Revenue, expenses Accounts that go on the Balance Sheet –Assets, Liabilities, Owners Equity If all else fails, everything above the INCOME SUMMARY goes in the balance sheet, every thing after goes in the income statement

19. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 2187 Prepaid Insureance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insureance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 Net Income

20. Total the columns Total the columns in the income statement Total the columns in the balance sheet

21. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 2187 Prepaid Insurance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 331244111247911380 Net Income

22. Finishing the work sheet In the income statement –Take the credit side and subtract out the debit side. In the balance sheet columns –Take the debit side and subtract out the credit side.

23. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 2187 Prepaid Insureance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insureance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 331244111247911380 Net Income 1099

24. Finishing the work sheet In the income statement –Take the credit side and subtract out the debit side. In the balance sheet columns –Take the debit side and subtract out the credit side. Rule of thumb after subtracting the numbers it always goes under the smaller of the amounts so that we may get it to equal.

25. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 2187 Prepaid Insureance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insureance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 331244111247911380 Net Income 1099

26. Encore Music Worksheet For Month Ending August 31 Account TitleTrial BalanceAdjustmentsIncome StatementBalance Sheet Cash8272 Petty Cash200 Account Rec. - Kids Time100 Accounts Rec. - Learn N Play20 Supplies4751 2564 2187 Prepaid Insurance1200 100 1100 Accounts Pay - Ling Music Supp 1360 Accounts Pay - Sullivan Off. Supp 20 Barbara Trevino, Cap 10000 Barbara Trevino, Draw600 Income Summary Sales 4411 Advertising Expense2730 Insurance Expense 100 Miscellaneous Expense10 Rent Expense250 Supplies Expense 2564 Utilities Expense115 15791 2664 331244111247911380 Net Income 1099 4411 12479

27. Problems 7-1,2,3,4,5