Lecture_Notes_-_Assign_3

# D transposition error difference9 whole number look

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d. Transposition error difference/9 = whole number - look for a reversal of digits (e.g. 327 is 327) Another way to find a transposition error is if the sum of the digits of the difference adds up to 9. (e.g. difference is 360 3+6+0=9) You are done! Now you can prepare the financial statements. Refer back to chapter 1 and the chart of accounts to review how the financial statements should be prepared. A B C D E F G H I J K QUICK REPAIRS End-of-Period Spreadsheet (Work Sheet) For the Year Ended October 31, 2008 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. 1 Cash 2,950 2,950 2,950 1 2 Supplies 12,295 (a) 5,175 7,120 7,120 2 3 Prepaid Insurance 2,735 (b) 2,000 735 735 3 4 Equipment 95,650 95,650 95,650 4 5 Accum. Depr.—Equip. 21,209 (c) 4,200 25,409 25,409 5 6 Trucks 36,300 36,300 36,300 6 7 Accum. Depr.—Trucks 7,400 (d) 2,200 9,600 9,600 7 8 Accounts Payable 4,015 4,015 4,015 8 9 Rhonda Salter, Capital 67,426 67,426 67,426 9 10 Rhonda Salter, Drawing 6,000 6,000 6,000 10 11 Service Revenue 99,950 99,950 99,950 11 12 Wages Expense 26,925 (e) 600 27,525 27,525 12 13 Rent Expense 9,600 9,600 9,600 13 14 Truck Expense 5,350 5,350 5,350 14 15 Misc. Expense 2,195 2,195 2,195 15 16 200,000 200,000 16 17 Supplies Expense (a) 5,175 5,175 5,175 17 18 Insurance Expense (b) 2,000 2,000 2,000 18 19 Depr. Exp.—Equipment (c) 4,200 4,200 4,200 19 20 Depr. Exp.—Trucks (d) 2,200 2,200 2,200 20 21 Wages Payable (e) 600 600 600 21 22 14,175 14,175 207,000 207,000 58,245 99,950 148,755 107,050 22 23 Net income 41,705 ______ ______ 41,705 23 24 99,950 99,950 148,755 148,755 24

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Closing Entries Permanent Accounts – balance sheet - They always carry a balance. Temporary Accounts – income statement and drawing. They are for a period in time. The following are the four closing entries done at the end of every accounting cycle. 1. Close revenue to Income Summary Dr All revenue accounts – list separately Cr Income Summary – for the total of all revenue accounts 2. Close expense accounts to Income Summary Dr Income Summary – for the total of all revenue accounts Cr All expense accounts – list separately – this will be a long list 3. Close Income Summary to Capital Dr Income Summary Cr Capital (This entry will be reversed if it is a net loss.) 4. Close Drawing to Capital Dr Capital Cr Drawing Income Summary is a very temporary account used to close only the revenue and expense accounts. The final amount credited to income summary is the net income. The temporary accounts of revenue, expenses, and drawing are closed into the capital account. The balance in the capital account is now the ending balance shown on the balance sheet.
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• Summer '12
• Rose
• Trial Balance, Expense, Generally Accepted Accounting Principles, DR Capital, dr Income Summary

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