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WORK SHEET
To complete the columns of a work sheet:
1. List all account balances from the ledger in the
Trial Balance columns. Total the Debit and Credit columns; they should be equal.
2. Record the adjusting entries in the Adjustments
columns. Total the Debit and Credit columns;
they should be equal.
3. Enter the balance of each account, after computing any changes due to adjusting entries, in the
Adjusted Trial Balance columns. Total the Debit
and Credit columns; they should be equal.
4. Enter the balance of all revenue and expense
accounts in the Income Statement columns. Total the Debit and Credit columns; the difference
between these columns is Net Income.
5. Enter the balance of assets, liabilities, capital
stock, and dividends in the Balance Sheet columns. Total the Debit and Credit columns. Net
income must be added to the Credit column to
make the Balance Sheet columns balance.
END-OF-PERIOD
SPREADSHEET (WORK SHEET)
Enter the following adjusting entries on the endof-period spreadsheet (work sheet) for Dixie Machinery:
1. $375 of the prepaid insurance has expired.
3. Depreciation to be recorded on the office
equipment is $400.
4. $350 of salaries are owed to Dixie Machinerys employees.
E
F
G
Dixie Machinery
End-of-Period Spreadsheet (Work Sheet)
For the Year Ended December 31, 20-Unadjusted
Adjusted
Trial Balance
Adjustments
Trial Balance
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
825
825
300
300
500
375
125
5,050
5,050
180
400
580
250
250
350
350
2,370
2,370
1,100
1,100
15,140
15,140
8,025
350
8,375
1,500
1,500
640
640
375
375
375
400
400
400
17,940
17,940
1,125
1,125
18,690
18,690
I
J
K
Dixie Machinery
End-of-Period Spreadsheet (Work Sheet)
For the Year Ended December 31, 20-Adjusted
Income
Balance
Trial Balance
Statement
Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
825
825
300
300
125
125
5,050
5,050
580
580
250
250
350
350
2,370
2,370
1,100
1,100
15,140
15,140
8,025
8,375
1,500
1,500
640
640
375
375
400
400
18,690
18,690
11,290
15,140
7,400
7,400
FINANCIAL STATEMENTS
Income Statement
Revenues
Expenses
Net Income
Balance Sheet
Current Assets
(from the work sheet)
+ Property, Plant & Equip. (from the work sheet)
Total Assets
Current Liabilities
+ Long-Term Liabilities
Total Liabilities
+ Capital Stock (from the worksheet)
+ Retained Earnings (from Retained Earnings statement)
Total Liabilities and
Stockholder's Equity
FINANCIAL STATEMENTS
Dixie Machinery
Income Statement
For the Year Ended December 31, 20-Revenues:
Repair revenue .............................
Expenses:
Salaries expense ..........................
Rent expense ...............................
Utilities expense ..........................
Depreciation expenseoffice
equipment .................................
Insurance expense.......................
$15,140
$8,375
1,500
640
400
375
11,290
$ 3,850
Dixie Machinery
Retained Earnings Statement
For the Year Ended December 31, 20-Retained Earnings, January 1 .............
Net income ............................................
Less dividends .....................................
Increase in Retained Earnings ............
Retained Earnings, December 31 ........
$3,850
1,100
2,750
$2,750
FINANCIAL STATEMENTS
Dixie Machinery
Balance Sheet
December 31, 20-Assets
Current assets:
Cash ............................ $ 825
Accounts receivable .. 300
Prepaid insurance ...... 125
Total current assets
$1,250
Liabilities
Current liabilities:
Accounts payable ............. $ 250
Salaries payable ...............
350
Total liabilities ......................
$ 600
Stockholders Equity
Property, plant , and equipment:
Office equipment ........ $5,050
Less accumulated
depreciation ......
580
Total property, plant,
and equipment
4,470
Total assets.....................
$5,720
2,370
2,750
$5,720
WRITING EXERCISE
Keith Martin is the controller for Daniels Printing Service. Keith has been putting in a lot of overtime; therefore, Mr. Daniels has allowed Keith to hire an assistant.
Keith's assistant is a bright high school graduate, but
he has never taken an accounting class. Keith is trying
to decide which accounting activities could be delegated to his assistant. Keith is willing to give the assistant a few simple instructions on how to complete each
task, but he doesn't have time to teach the assistant to
be an accountant.
For each task listed, state whether Keith should continue to do the work or delegate the task to his assistant.
Explain each answer.
1. List the account balances from the general ledger in
the Trial Balance columns of the end-of-period
spreadsheet.
2. Add the Debit and Credit columns of the trial balance.
3. Make the adjusting entries on the spreadsheet.
4. Complete the spreadsheet.
5. Type the formal financial statements using the data
from the Income Statement and Balance Sheet columns of the spreadsheet.
6. Journalize and post the adjusting entries.
CLOSING ENTRIES
Part A
Service Revenue
3,500 Bal.
3,500
Bal.
Bal.
Bal.
Bal.
Bal.
Salaries Expense
1,400
1,400
0
Dividends
1,200
Bal.
Bal.
1,200
Rent Expense
600
600
0
Retained Earnings
1,400
600
3,500
1,200
Bal.
300
J. Jones Company
Income Statement
For the Year Ended December 31, 20-Service revenue .................................
$3,500
Expenses:
Salaries expense ............................
$1,400
600
2,000
$1,500
J. Jones Company
Retained Earnings Statement
For the Year Ended December 31, 20-Retained Earnings January 1 .......
$00
$1,500
1,200
300
$300
CLOSING ENTRIES
Part B
a.
Service Revenue
Bal.
3,500
3,500
Bal.
Bal.
Bal.
b.
c.
Rent Expense
600
b.
Salaries Expense
Bal.
1,400
b.
1,400
Bal.
Bal.
600
Bal.
Income Summary
a.
3,500
2,000
Bal. 1,500*
1,500
Bal.
Dividends
1,200
d.
1,200
0
Retained Earnings
c.
d.
1,500
1,200
Bal.
300
WRITING EXERCISE
1. Why are closing entries prepared?
2. Why do we use Income Summary when preparing closing entries?
3. Why are closing entries prepared after financial statements?
4. What are some examples of temporary accounts that would be closed for a physician?