Lee Tze Saw

BAF3M
Module 2 Activity 5

Background Information
In this activity we expand on our understanding of adjusting entries with the
use of a work sheet. Firstly we learn about an 8 column work sheet. An eight-
column work sheet includes the trial balance, adjustments, income statement,
and balance sheet all combined on one sheet in columnar format (see page 227
of your text for an example). You will also learn about a 10-column work sheet,
where two extra columns are used to prepare an adjusted trial balance.

Part B: Thinking and Inquiry

Questions
Complete the following questions from your textbook, Principles of Accounting:
Page 233, (Questions 14, 16, 17 )

Q14) What two columns are added to an 8-column work sheet? For what
are the two-column used?
Adjustment debit side and credit side. The purpose of these two columns are
prepared for accountant to plan the necessary adjustments in order to
achieve correctness of financial statement.

Q16) When there is a net loss, which column total of the income
statement section of the work sheet is greater? Which column total of
the balance sheet section is greater?
When debit column of the income statement section is greater than credit
column, net loss occurred. While in balance sheet column of work sheet, total
of credit column credit is greater than debit column because net loss
decrease(debit) owner’s equity.

Q17) when there is a net income to which columns on the work sheet is
the amount of the met income added?
When there is a net income, in income statement of work sheet debit column
is added and on balance sheet credit column is added.
Page 233, (Exercise 7)
Ex7)

$700-200=$500
Supplies expense (debit) $500
Supplies (credit) $500

Equipment 45,000 x 20% = 9000

45,000-9000= 36,000
36,000 x 20% = 7200
Accumulated depreciation 7200 (credit)
Depreciation expense (debit) 7200