Lecture_Notes_-_Assign_3

B insurance premiums expired during year are 2000 c

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b. Insurance premiums expired during year are $2,000. c. Depreciation of equipment during year is $4,200. d. Depreciation of trucks during year is $2,200. e. Wages accrued but not paid at October 31, are $600.
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Notes: 1. Title: The worksheet title is the same as the financial statements Company Name Worksheet For the ________Ended, Date 2. Start by copying the trial balance from the textbook into the first two column of the worksheet. Add up the columns to prove that debits equal credits – this will tell you now if a number has been copied wrong. If you are using excel, to find a total: =sum( now click/highlight on all boxes to add ). 3. Adjustments. Place the adjusting entries in the two adjustment columns. Again total the columns to prove debits equal credits. You will not have all of the account names that you need written in the left hand column. Add the new account names at the bottom. Common ones to add: supplies expense, depreciation expense, wages payable, etc. 4. Adjusted Trial Balance. For every account name and every row that has a number in the first four columns, a number must be placed under Adjusted Trial Balance. For cash, it is a debit in Trial Balance, no Adjustment, so record the cash number as a debit in Adjusted Trial Balance. If numbers appear in both the Trial Balance and Adjustment columns: debit + debit or credit + credit, add; debit – credit, subtract and place in the debit column; credit – debit, subtract and place in the credit column. Again, total the columns to prove they equal. They must equal before you can go on. 5. Income Statement and Balance Sheet. Each number in the Adjusted Trial Balance columns must now be moved to either an income statement column or balance sheet column. Each number in the Adjusted Trial Balance columns will only go in one of the four remaining columns. Drawing and all the numbers above it, go on the balance sheet side. Revenue and all the accounts from the original trial balance go on the income statement. Watch the new accounts that you have added at the bottom – they can go in any column. Check the Chart of Accounts if you are uncertain where an account belongs. 6. Total the Income Statement and Balance Sheet columns. You will find that the debits and credits do not equal – this is normal. The difference between the debits and credits on the balance sheet and the debits and credits on the income statement will equal – and the amount is the net income. Record the difference in the correct column and write new totals so that the debits and credits do equal. 7. Hints for searching for reasons why the columns don’t equal. a. Zero’s = 10, 300, 3000 check addition b. Debit total – Credit total = difference. If the difference equals an amount, the account was omitted from a column.
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c. Take the difference and divide by 2. If the difference equals an amount, the amount is in the wrong column (e.g. on debit side, should be a credit).
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