the heading should identify the entity, the document and the time period
DESCRIPTION
The heading should identify the entity, the document and the time period. The worksheet collects and summarizes the information used to prepare financial statements, adjusting entries and closing entries. Step 1 Enter the unadjusted trial balance on the worksheet. - PowerPoint PPT PresentationTRANSCRIPT
AccountDr Cr Dr Cr Dr Cr Dr Cr Dr Cr
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Balance Sheet Unadjusted Trial Balance
Adjustments Adjusted Trial
Balance Income Statement
The heading should identify the entity, the document and
the time period.
AccountDr Cr Dr Cr Dr Cr Dr Cr Dr Cr
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Balance Sheet Unadjusted Trial
Balance Adjustments
Adjusted Trial Balance
Income Statement
The worksheet collects and summarizes the information used to prepare financial statements, adjusting entries and closing entries.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600
Prepaid insurance 2,400
Furniture 6,000
Accumulated amortization, furniture
Accounts payable 200
Unearned consulting revenue 3,000
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800
Rental revenue 300
Salaries expense 1,400
Rent expense 1,000
Utilities expense 230
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
Step 1
Enter the unadjusted trial balance on the
worksheet
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600
Prepaid insurance 2,400
Furniture 6,000
Accumulated amortization, furniture
Accounts payable 200
Unearned consulting revenue 3,000
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800
Rental revenue 300
Salaries expense 1,400
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
These two columns totals must be in balance!
Dr = Cr
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600
Prepaid insurance 2,400
Furniture 6,000
Accumulated amortization, furniture
Accounts payable 200
Unearned consulting revenue 3,000
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800
Rental revenue 300
Salaries expense 1,400
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Step 2
Enter the adjustments
directly onto the worksheet
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600
Prepaid insurance 2,400
Furniture 6,000
Accumulated amortization, furniture
Accounts payable 200
Unearned consulting revenue 3,000
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800
Rental revenue 300
Salaries expense 1,400
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense
Supplies expense
Amortization expense, furniture
Salaries payable
Interest expense
Interest payable
Accounts receivable
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
You may need to add additional accounts
Step 2
Enter the adjustments
directly onto the worksheet
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600 b) 1,050
Prepaid insurance 2,400 a) 100
Furniture 6,000
Accumulated amortization, furniture c) 200
Accounts payable 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
For Month Ended January 31, 2005
Work Sheet
Trial Balance Adjustments Adjusted Trial Balance
Step 2
Enter the adjustments
directly onto the worksheet
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600 b) 1,050
Prepaid insurance 2,400 a) 100
Furniture 6,000
Accumulated amortization, furniture c) 200
Accounts payable 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
These two columns totals must be in balance!
Dr = Cr
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 3,600 b) 1,050
Prepaid insurance 2,400 a) 100
Furniture 6,000
Accumulated amortization, furniture c) 200
Accounts payable 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Trial Balance Adjustments Adjusted Trial Balance
Step 3
Sum the unadjusted trial balance with the
adjustments and enter the total in the adjusted trial balance column.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050
Prepaid insurance 2,400 a) 100
Furniture 6,000
Accumulated amortization, furniture c) 200
Accounts payable 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #1
Remember that if an account has a debit balance
on the unadjusted trial balance, it will have a debit
balance on the adjusted trial balance as well.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050 2,550
Prepaid insurance 2,400 a) 100
Furniture 6,000
Accumulated amortization, furniture c) 200
Accounts payable 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #2
A debit balance is increased by a debit adjustment but would be
decreased by a credit adjustment. Therefore, for supplies, $3,600 – 1,050 = 2,550
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050 2,550
Prepaid insurance 2,400 a) 100 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture c) 200 200
Accounts payable 200 200
Unearned consulting revenue 3,000 d) 250
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #3
Similarly, if an account has a credit balance on the
unadjusted trial balance, it will have a credit balance
on the adjusted trial balance as well.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050 2,550
Prepaid insurance 2,400 a) 100 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture c) 200 200
Accounts payable 200 200
Unearned consulting revenue 3,000 d) 250 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 3,800 d) 250
g) 1,800
Rental revenue 300
Salaries expense 1,400 f) 70
Rent expense 1,000
Utilities expense 230
Totals 23,300 23,300
Insurance expense a) 100
Supplies expense b) 1,050
Amortization expense, furniture c) 200
Salaries payable f) 70
Interest expense e) 35
Interest payable e) 35
Accounts receivable g) 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #4
When an account has a credit balance on the unadjusted trial balance, it will be decreased by a debit adjustment and increased by a credit adjustment. For
unearned consulting revenue, $3,000 - 250 = $2,750
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050 2,550
Prepaid insurance 2,400 a) 100 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture c) 200 200
Accounts payable 200 200
Unearned consulting revenue 3,000 d) 250 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 3,800 d) 250 5,850
g) 1,800
Rental revenue 300 300
Salaries expense 1,400 f) 70 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Totals 23,300 23,300
Insurance expense a) 100 100
Supplies expense b) 1,050 1,050
Amortization expense, furniture c) 200 200
Salaries payable f) 70 70
Interest expense e) 35 35
Interest payable e) 35 35
Accounts receivable g) 1,800 1,800
Totals 3,505 3,505
For Month Ended January 31, 2005
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #5
If a new account was added because of adjusting entries, then
the adjusted trial balance will equal the amount of the debit or credit entered in the adjustments
column.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 3,600 b) 1,050 2,550
Prepaid insurance 2,400 a) 100 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture c) 200 200
Accounts payable 200 200
Unearned consulting revenue 3,000 d) 250 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 3,800 d) 250 5,850
g) 1,800
Rental revenue 300 300
Salaries expense 1,400 f) 70 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Totals 23,300 23,300
Insurance expense a) 100 100
Supplies expense b) 1,050 1,050
Amortization expense, furniture c) 200 200
Salaries payable f) 70 70
Interest expense e) 35 35
Interest payable e) 35 35
Accounts receivable g) 1,800 1,800
Totals 3,505 3,505 25,405 25,405
For Month Ended January 31, 2005
Finlay InteriorsWork Sheet
Trial Balance Adjustments Adjusted Trial Balance
Helpful Hint #6
Don’t forget to add all the debits in the debit column of the adjusted trial balance and make sure they
are equal to all of the credits in the credit column. As always,
Dr = Cr
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 2,550
Prepaid insurance 2,300
Furniture 6,000
Accumulated amortization, furniture 200
Accounts payable 200
Unearned consulting revenue 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 5,850
Rental revenue 300
Salaries expense 1,470
Rent expense 1,000
Utilities expense 230
Insurance expense 100
Supplies expense 1,050
Amortization expense, furniture 200
Salaries payable 70
Interest expense 35
Interest payable 35
Accounts receivable 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Step 4
Complete the worksheet.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 2,550
Prepaid insurance 2,300
Furniture 6,000
Accumulated amortization, furniture 200
Accounts payable 200
Unearned consulting revenue 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 5,850
Rental revenue 300
Salaries expense 1,470
Rent expense 1,000
Utilities expense 230
Insurance expense 100
Supplies expense 1,050
Amortization expense, furniture 200
Salaries payable 70
Interest expense 35
Interest payable 35
Accounts receivable 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #7
Once the adjusted trial balance columns are in balance, you can ignore the
previous four columns. Only the balance from the adjusted trial balance column will be entered in ONE of the last four
columns.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 2,550
Prepaid insurance 2,300
Furniture 6,000
Accumulated amortization, furniture 200
Accounts payable 200
Unearned consulting revenue 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470
Rent expense 1,000
Utilities expense 230
Insurance expense 100
Supplies expense 1,050
Amortization expense, furniture 200
Salaries payable 70
Interest expense 35
Interest payable 35
Accounts receivable 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial BalanceHelpful Hint #8
The income statement columns will only have income statement accounts in them (i.e. revenues and expenses). Revenues have
credit balances and will therefore be entered in the credit columns.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070
Supplies 2,550
Prepaid insurance 2,300
Furniture 6,000
Accumulated amortization, furniture 200
Accounts payable 200
Unearned consulting revenue 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,610
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70
Interest expense 35 35
Interest payable 35
Accounts receivable 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial BalanceHelpful Hint #9
Expenses have debit balances and will
therefore be entered in the debit columns.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200
Accounts payable 200
Unearned consulting revenue 2,750
Notes Payable 6,000
Carol Finlay, capital 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Totals
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70
Interest expense 35 35
Interest payable 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #10
The balance sheet columns contain assets, liabilities, capital and withdrawals. A debit from the adjusted trial balance is
recorded in the debit column of the balance sheet.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #11
A credit from the adjusted trial balance is recorded in the credit column of the balance
sheet.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405 4,085 6,150 21,320 19,255
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Total each of the four columns. The debits will not
be equal to the credits.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405 4,085 6,150 21,320 19,255
Net income 2,065
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Step 5
Calculate net income (loss) by subtracting the debits (expenses) from the revenues (credits).
This amount should be entered under the smaller of the two totals. In this case,
$6,150 – 4,085 = 2,065. This number will be put in the debit column.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405 4,085 6,150 21,320 19,255
Net income 2,065 2,065
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #12
Since net income was entered in the debit column of the income
statements, it will also be entered in the balance sheet. This time, as a credit, since
Dr = Cr
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 2,550 2,550
Prepaid insurance 2,300 2,300
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 5,850 5,850
Rental revenue 300 300
Salaries expense 1,470 170
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 25,405 25,405 2,785 6,150 21,320 19,255
Net income 3,365 2,065 Totals 6,150 6,150 21,320 21,320
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #13
Now, the last check of the worksheet is to total the income
statement and balance sheet columns again. If you have completed the worksheet
correctly: Dr = Cr
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 200 200
Prepaid insurance 1,000 1,000
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 2,200 2,200
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 21,755 21,755 4,085 2,500 17,670 19,255
Net loss 1,585 1,585Totals 4,085 4,085 19,255 19,255
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #14
Now, how do we complete this section of the work sheet in the
case of a net loss? To demonstrate, assume instead
that total expenses were 4,085 and revenues were 2,500.
Account
Dr Cr Dr Cr Dr Cr
Cash 8,070 8,070
Supplies 200 200
Prepaid insurance 1,000 1,000
Furniture 6,000 6,000
Accumulated amortization, furniture 200 200
Accounts payable 200 200
Unearned consulting revenue 2,750 2,750
Notes Payable 6,000 6,000
Carol Finlay, capital 10,000 10,000
Carol Finlay, withdrawals 600 600
Consulting revenue 2,200 2,200
Rental revenue 300 300
Salaries expense 1,470 1,470
Rent expense 1,000 1,000
Utilities expense 230 230
Insurance expense 100 100
Supplies expense 1,050 1,050
Amortization expense, furniture 200 200
Salaries payable 70 70
Interest expense 35 35
Interest payable 35 35
Accounts receivable 1,800 1,800
Totals 21,755 21,755 4,085 2,500 17,670 19,255
Net loss 1,585 1,585Totals 4,085 4,085 19,255 19,255
Finlay InteriorsWork Sheet
For Month Ended January 31, 2005
Income Statement Balance SheetAdjusted Trial Balance
Helpful Hint #15
Under this assumption, the difference between revenues
and expenses equals a net loss of 1,585. This amount should be entered under the smaller of the two totals. Enter 1,585 in
the credit column of the income statement and the debit column
of the balance sheet.