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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 on theme: "Lecture 11 Chapter 04 Completing the Accounting Cycle Task Force Image Gallery clip art included in this electronic presentation is used with the permission."— Presentation transcript:

1 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.

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

3 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

4 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

5 Cash2,0652,065 Accounts Receivable2,220(e) 5002,720 Supplies2,000(a) 1,240760 Prepaid Insurance2,400(b) 1002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable900900 Unearned Rent360(c) 120240 Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,340(e) 50016,840 Wages Expense4,275(d) 2504,525 Rent Expense1,6001,600 Utilities Expense985985 Supplies Expense800(a) 1,2402,040 Miscellaneous Expense45545542,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Insurance Expense(b) 100 100 Rent Revenue (c) 120120 Wages Payable(d) 250250 Depreciation Expense(f) 5050 Accum. Depreciation(f) 5050 2,2602,26043,40043,400

6 Cash2,0652,065 Accounts Receivable2,220(e) 5002,720 Supplies2,000(a) 1,240760 Prepaid Insurance2,400(b) 1002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable900900 Unearned Rent360(c) 120240 Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,340(e) 50016,840 Wages Expense4,275(d) 2504,525 Rent Expense1,6001,600 Utilities Expense985985 Supplies Expense800(a) 1,2402,040 Miscellaneous Expense45545542,600 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Adjustments Trial Balance Insurance Expense(b) 100 100 Rent Revenue (c) 120120 Wages Payable(d) 250250 Depreciation Expense(f) 5050 Accum. Depreciation(f) 5050 2,2602,26043,40043,400

7

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

9 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

10

11 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

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13 Cash2,0652,065 Accounts Receivable2,7202,720 Supplies760760 Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable900900 Unearned Rent240240 Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense985985 Supplies Expense2,0402,040 Miscellaneous Expense455455 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense100100 Rent Revenue 120120 Wages Payable250250 Depreciation Expense5050 Accum. Depreciation5050 43,40043,400

14 Cash2,0652,065 Accounts Receivable2,7202,720 Supplies760760 Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable900900 Unearned Rent240240 Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense985985 Supplies Expense2,0402,040 Miscellaneous Expense455455 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense100100 Rent Revenue 120120 Wages Payable250250 Depreciation Expense5050 Accum. Depreciation5050 43,40043,400

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17 Cash2,0652,065 Accounts Receivable2,7202,720 Supplies760760 Prepaid Insurance2,3002,300 Land20,00020,000 Office Equipment1,8001,800 Accounts Payable900900 Unearned Rent240240 Capital Stock25,00025,000 Dividends4,0004,000 Fees Earned16,84016,840 Wages Expense4,5254,525 Rent Expense1,6001,600 Utilities Expense985985 Supplies Expense2,0402,040 Miscellaneous Expense455455 Account TitleDebitCreditDebitCreditDebitCredit Adjusted Trial Balance Income Statement Balance Sheet Insurance Expense100100 Rent Revenue 120120 Wages Payable250250 Depreciation Expense5050 Accum. Depreciation5050 43,40043,4009,75516,96033,64526,440

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20 9,75516,96033,64526,4407,205 16,96016,96033,64533,645 Income Statement Balance Sheet Net Income

21 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.

22 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

23 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

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

25 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

26 End of Lecture 11

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