Worksheet

Mohammed Moin Uddin Reza Nadim

Bangladesh University of Professionals (BUP)
Steps in Preparing a Worksheet
Original Trial Balance
 Additional Information

1. Pioneer Advertising Agency purchased advertising supplies costing $2,500 on October 5. Sierra
recorded the payment by increasing (debiting) the asset Advertising Supplies. This account shows a
balance of $2,500 in the October 31 trial balance. An inventory count at the close of business on
October 31 reveals that $1,000 of supplies are still on hand.

2. On October 4, Pioneer Advertising Agency paid $600 for a one-year fire insurance policy.
Coverage began on October 1. Pioneer recorded the payment by increasing (debiting) Prepaid
Insurance. This account shows a balance of $600 in the October 31 trial balance. Insurance of $50
($600 / 12) expires each month.

3. Pioneer Advertising estimates depreciation on the office equipment to be $480 a year, or $40 per
month.
 Additional Information

4. Pioneer Advertising Agency received $1,200 on October 2 from R. Knox for advertising services expected to
be completed by December 31. Unearned Service Revenue shows a balance of $1,200 in the October 31 trial
balance. Analysis reveals that the company earned $400 of those fees in October.

5. In October Pioneer Advertising Agency earned $200 for advertising services that had not been recorded.

6. Pioneer Advertising Agency signed a three-month note payable in the amount of $5,000 on October 1. The
note requires Pioneer to pay interest at an annual rate of 12%.

7. Pioneer Advertising Agency last paid salaries on October 26; the next payment of salaries will not occur until
November 9. The employees receive total salaries of $2,000 for a five-day work week, or $400 per day. Thus,
accrued salaries at October 31 are $1,200 ($400 x 3 days).
 Steps in Preparing a Worksheet
1. Prepare a Trial Balance on the Worksheet
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200
Supplies 2,500
Prepaid Insurance 600
Office Equipment 5,000
Notes Payable 5,000
Accounts Payable 2,500
Unearned Revenue 1,200
Owner's Capital 10,000
Owner's Drawing 500
Service Revenue 10,000

Salaries Expense 4,000

Rent Expense 900
Totals 28,700 28,700

Trial balance amounts come

directly from ledger accounts.
Include all accounts
with balances.
Steps in Preparing a Worksheet

Adjusting
Journal
Entries
 Steps in Preparing a Worksheet
2. Enter the Adjustments in the Adjustments Columns
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200
Supplies 2,500 (a) 1,500
Prepaid Insurance 600 (b) 50
Office Equipment 5,000
Adjustments Key:
Notes Payable 5,000 (a) Supplies Used.
Accounts Payable 2,500
Unearned Revenue 1,200 (d) 400 (b) Insurance Expired.
Owner's Capital 10,000
(c) Depreciation Expensed.
Owner's Drawing 500
Service Revenue 10,000 (d) 400 (d) Service Revenue Earned.
(e) 200
Salaries Expense 4,000 (g) 1,200
(e) Service Revenue Accrued.
Rent Expense 900 (f) Interest Accrued.
Totals 28,700 28,700
Supplies Expense (a) 1,500 (g) Salaries Accrued.
Insurance Expense (b) 50
Accumulated Depreciation (c) 40
Depreciation Expense (c) 40
(e)
Accounts Receivable 200 Enter adjustment amounts, total
(f)
Interest Expense 50
Interest Payable (f) 50 adjustments columns,
(g)
Salaries Payable 1,200 and check for equality.
Totals 3,440 3,440

Add additional accounts as needed.

 Steps in Preparing a Worksheet
3. Complete the Adjusted Trial Balance Columns
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200 15,200
Supplies 2,500 (a) 1,500 1,000
Prepaid Insurance 600 (b) 50 550
Office Equipment 5,000 5,000
Notes Payable 5,000 5,000
Accounts Payable 2,500 2,500
Unearned Revenue 1,200 (d) 400 800
Owner's Capital 10,000 10,000
Owner's Drawing 500 500
Service Revenue 10,000 (d) 400 10,600
(e) 200
Salaries Expense 4,000 (g) 1,200 5,200
Rent Expense 900 900
Totals 28,700 28,700
Supplies Expense (a) 1,500 1,500
Insurance Expense (b) 50 50
Accumulated Depreciation (c) 40 40
Depreciation Expense (c) 40 40
(e)
Accounts Receivable 200 200
(f)
Interest Expense 50 50
Interest Payable (f) 50 50
(g)
Salaries Payable 1,200 1,200
Totals 3,440 3,440 30,190 30,190

Total the adjusted trial balance

columns and check for equality.
 Steps in Preparing a Worksheet
4. Extend Amounts to Financial Statement Columns
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200 15,200
Supplies 2,500 (a) 1,500 1,000
Prepaid Insurance 600 (b) 50 550
Office Equipment 5,000 5,000
Notes Payable 5,000 5,000
Accounts Payable 2,500 2,500
Unearned Revenue 1,200 (d) 400 800
Owner's Capital 10,000 10,000
Owner's Drawing 500 500
Service Revenue 10,000 (d) 400 10,600 10,600
(e) 200
Salaries Expense 4,000 (g) 1,200 5,200 5,200
Rent Expense 900 900 900
Totals 28,700 28,700
Supplies Expense (a) 1,500 1,500 1,500
Insurance Expense (b) 50 50 50
Accumulated Depreciation (c) 40 40
Depreciation Expense (c) 40 40 40
(e)
Accounts Receivable 200 200
(f)
Interest Expense 50 50 50
Interest Payable (f) 50 50
(g)
Salaries Payable 1,200 1,200
Totals 3,440 3,440 30,190 30,190 7,740 10,600

Extend all revenue and expense account

balances to the income statement columns.
 Steps in Preparing a Worksheet
5. Total Columns, Compute Net Income (Loss)
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200 15,200 15,200
Supplies 2,500 (a) 1,500 1,000 1,000
Prepaid Insurance 600 (b) 50 550 550
Office Equipment 5,000 5,000 5,000
Notes Payable 5,000 5,000 5,000
Accounts Payable 2,500 2,500 2,500
Unearned Revenue 1,200 (d) 400 800 800
Owner's Capital 10,000 10,000 10,000
Owner's Drawing 500 500 500
Service Revenue 10,000 (d) 400 10,600 10,600
(e) 200
Salaries Expense 4,000 (g) 1,200 5,200 5,200
Rent Expense 900 900 900
Totals 28,700 28,700
Supplies Expense (a) 1,500 1,500 1,500
Insurance Expense (b) 50 50 50
Accumulated Depreciation (c) 40 40 40
Depreciation Expense (c) 40 40 40
(e)
Accounts Receivable 200 200 200
(f)
Interest Expense 50 50 50
Interest Payable (f) 50 50 50
(g)
Salaries Payable 1,200 1,200 1,200
Totals 3,440 3,440 30,190 30,190 7,740 10,600 22,450 19,590
Net Income 2,860 2,860
Totals 10,600 10,600 22,450 22,450
Compute Net Income or Net Loss.
 DO IT 17.1
The Super Motel opened for business on May 1, 2015. Its trial Balance before adjustment
on December 31 is as follows:
SUPER MOTEL
Trial Balance
December 31, 2015

Particulars Debit Credit

Cash 2500
Prepaid Insurance 1800
Supplies 1900
Land 15000
Lodge 70000
Furniture 16800
Accounts Payable 4700
Unearned Rent Revenue 3600
Mortgage Payable 35000
Sara Sutton, Capital 60000
Rent Revenue 9200
Salaries Expense 3000
Utilities Expense 1000
Advertising Expense 500
 DO IT 17.1
Other Data:

1. Insurance expires at the rate of 200 taka per month.

2. An inventory of supplies shows 1200 taka of unused supplies on December 31.
3. Annual Depreciation of 2400 Taka on lodge and 1800 taka on furniture.
4. The mortgage interest rate is 24%. (The mortgage was taken out on May 1.)
5. Unearned rent of 1000 taka has been earned.
6. Salaries of 300 taka are accrued and unpaid at December 31.

Instructions:

Prepare 10 column worksheet