1. Chapter 3 Lecture 08

2. Review of Lecture The Matching Concept and the Adjusting Process Reporting Revenues and Expenses Deferred Expenses (Prepaid Expenses) Deferred Revenue (Unearned Revenue) Accrued Expenses (Accrued Liabilities) Accrued Revenues (Accrued Assets) Fixed Assets Effect of Omitting Adjustment

3. Opportunities Trial Balance December 31, 2010 Cash2 065 Accounts Receivable2 220 Supplies2 000 Prepaid Insurance2 400 Land20 000 Office Equipment1 800 Accounts Payable900 Unearned Rent360 Javid Iqbal, Capital25 000 Javid Iqbal, Drawing4 000 Fees Earned16 340 Wages Expense4 275 Rent Expense1 600 Utilities Expense985 Supplies Expense800 Miscellaneous Expense45542 600 Unadjusted trial balance

6. Opportunities Inc.’ Adjusted Trial Balance for December 31, 2010

7. Opportunities Adjusted 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 Javid Iqbal, Capital25 000 Javid Iqbal, Drawing4 000 Fees Earned16 840 Rent Revenue120 Wages Expense4 525 Rent Expense1 600 Utilities Expense985 Continued

8. Opportunities Inc. Trial Balance December 31, 2010 (Continued) Supplies Expense2 040 Insurance Expense100 Miscellaneous Expense45543 400

9. Vertical Analysis and Interpretation

10. Fees earnedRs.187,500Rs.150,000 Operating expenses: Wages expense60,00045,000 Rent expense15,00012,000 Utilities expense12,5009,000 Supplies expense2,7003,000 Miscellaneous exp. 2,300 1,800 Total operating expenses92,500 70,800 Net income95,00079,200 Amount Percent Amount Percent 2011 2010 J. Holmes, Attorney-at-Law Income Statements For the Years Ended December 31, 2010 and 2010

11. Fees earnedRs.187,500100.0%Rs.150,000100.0% Operating expenses: Wages expense60,00045,000 Rent expense15,00012,000 Utilities expense12,5009,000 Supplies expense2,7003,000 Miscellaneous exp. 2,300 1,800 Total operating expenses92,500 70,800 Net income95,00079,200 Amount Percent Amount Percent 2011 2010

12. Fees earnedRs.187,500100.0%Rs.150,000100.0% Operating expenses: Wages expense60,000$45,000 Rent expense15,00012,000 Utilities expense12,5009,000 Supplies expense2,7003,000 Miscellaneous exp. 2,300 1,800 Total operating expenses92,50070,800 Net income95,00079,200 2011 2010 Amount Percent Amount Percent60,000187,50060,000187,500 32.0% 8.0%

13. Fees earnedRs.187,500100.0%Rs.150,000100.0% Operating expenses: Wages expense60,00045,000 Rent expense15,00012,000 Utilities expense12,5009,000 Supplies expense2,7003,000 Miscellaneous exp. 2,300 1,800 Total operating expenses92,50070,800 Net income95,00079,200 2011 2010 Amount Percent Amount Percent 32.0% 8.0%

14. Fees earned187,500100.0%150,000100.0% Operating expenses: Wages expense60,00045,00030.0% Rent expense15,00012,0008.0% Utilities expense12,5009,0006.0% Supplies expense2,7003,0002.0% Miscellaneous exp. 2,300 1,800 1.2% Total operating expenses92,50070,80047.2% Net income95,00079,20052.8% 6.7% 1.4% 1.2% 49.3% 50.7% 2011 2010 Amount Percent Amount Percent 32.0% 8.0%

15. Review Types of Businesses Types of Business Organizations GAAP Accounting equation Transactions Rules of Dr and Cr Journalizing Posting into Ledgers Balancing the Ledger Accounts Unadjusted Trial Balance

16. Review of Lecture The Matching Concept and the Adjusting Process Reporting Revenues and Expenses Deferred Expenses (Prepaid Expenses) Deferred Revenue (Unearned Revenue) Accrued Expenses (Accrued Liabilities) Accrued Revenues (Accrued Assets) Fixed Assets Effect of Omitting Adjustment Summary of Basic Adjustments Adjusted Trial Balance Vertical Analysis and Interpretation

17. The End Chapter 3