1. Lecture 12 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 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

3. Accounts Title Unadjusted Trial Balance AdjustmentsAdjusted Trial Balance Income Statement Balance Sheet DrCrDrCrDrCrDrCrDrCr Cash 2065 A/R 22205002720 Fees Earned 1634050016840 Wages /P 250 Opportunities Inc. Work Sheet For the Period 31 Dec, 2010

6. Income Summary Accounts

7. RETAINED EARNINGS Income Summary 1 Revenues are transferred to Income Summary2 Expenses are transferred to Income Summary 3 Net Income or Net Loss is transferred to Retained Earnings 4 Dividends are transferred to Retained Earnings Closing Process

8. RETAINED EARNINGS Income Summary 1 Revenues are transferred to Income Summary2 Expenses are transferred to Income Summary 3 Net Income or Net Loss is transferred to Retained Earnings 4 Dividends are transferred to Retained Earnings

9. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Fees Earned Bal.16,840 Rent Revenue Bal.120 Retained Earnings Dividends Bal.4,000 Income Summary

10. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Fees Earned Bal.16,840 Rent Revenue Bal.120 Retained Earnings Dividends Bal.4,000 Income Summary Debit each revenue account for the amount of its balance, and credit Income Summary for the total revenue. 16,840 120 16,960

11. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Retained Earnings Dividends Bal.4,000 Income Summary Debit Income Summary for the total expenses and credit each expense account for its balance. Fees Earned Bal.16,840 Rent Revenue Bal.120 16,840 120 16,9609,775 455 100 2,040 985 50 1,600 4,525

12. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Retained Earnings Dividends Bal.4,000 Income Summary Debit Income Summary for the amount of its balance (in this case, the net income) and credit Retained Earnings. Fees Earned Bal.16,840 Rent Revenue Bal.120 16,840 120 16,9609,775 455 100 2,040 985 50 1,600 4,525 7,205

13. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Retained Earnings Dividends Bal.4,000 Income Summary Debit Retained Earnings for the balance of Dividends and credit Dividend for the same amount. Fees Earned Bal.16,840 Rent Revenue Bal.120 16,840 120 16,9609,775 455 100 2,040 985 50 1,600 4,525 7,205 4,000 7,205

14. Wages Expense Bal.4,525 Rent Expense Bal.1,600 Depreciation Expense Bal.50 Utilities Expense Bal.985 Supplies Expense Bal.2,040 Insurance Expense Bal.100 Miscellaneous Expense Bal.455 Retained Earnings Dividends Bal.4,000 Income Summary Fees Earned Bal.16,840 Rent Revenue Bal.120 16,480 120 16,9609,775 445 100 2,040 985 50 1,600 4,525 7,205 4,000 Close Revenues Close Revenues Close Expenses Close Expenses Close Income Summary Close Income Summary Close Dividends Close Dividends 16,840 16,840 120 120 16,960 16,960 4,525 4,525 1,600 1,600 50 50 985 985 2,040 2,040 100 100 455 455 9,775 9,775 7,205 7,205 4,000 4,000

16. Opportunities Inc. Post-Closing Trial Balance December 31, 2010 Cash2 065 Accounts Receivable2 720 Supplies760 Prepaid Insurance2 300 Land20 000 Office Equipment1 800 Accumulated Depreciation50 Accounts Payable900 Wages Payable250 Unearned Rent240 Capital Stock25 000 Retained Earnings3 20529 645 Post Closing Trial Balance

17. Review of Lecture

18. Overview Chapter 4 Fixed Assets Effect of Omitting Adjustment Summary of Basic Adjustments Preparation of Income Statement Column Preparation of Balance Sheet Column Closing Entries After Closing Trial Balance

19. The End