FUNDAMENTALS OF ACCOUNTING

I. LESSON DISCUSSION:
PREPARING WORKSHEET
On our previous lessons, we already know the following:
 How to prepare trial balance.
 How to compute adjusting entries.
 How to prepare adjusted trial balance.
 How to prepare Statement of Financial Position or Balance Sheet
 How to prepare Statement of Income
How to prepare worksheet of a business?
In preparing worksheet, we need the following data:
1. Unadjusted Trial Balance

ABC COMPANY
UNADJUSTED TRIAL BALANCE
MARCH 31. 2014

Debit Credit
390,00
Cash 0
Accounts
Receivable 50,000
400,00
ABC Capital 0
106,00
Service Income 0
Rent Expense 10,000  
450,00 450,00
Total 0 0

2. Adjusting Entries
The following are the details of the transactions at the end of the period that require adjustments, as follows:
A. On March 31, 2014, the company received P56,000 cash for the services to be rendered on April 5, 2014
that was credited to service income account.
B. Received utility bill for P1,500 expected to be paid on the first week of April 2014.
C. Salaries for the month of March 2014 has been accrued and will be paid on April 2, 2014, P12,000.
The adjusting entries at the end of March 2014, are the following:
Date Account Titles & Particulars Debit Credit
       
2014      
March 31 Service Income 56,000  
  Unearned Service Income   56,000
  To adjust service income to unearned portion    
       
31 Utilities Expense 1,500  
  Accrued Utilities   1,500
  To record accrued utilities    
       
31 Salaries Expense 12,000  
  Accrued Salaries   12,000
  To record accrued salaries    

Preparing Worksheet for ABC Company

ABC COMPANY
WORKSHEET
 For the month ended March 31, 2014
Unadjusted Trial Adjusted Trial Income
  Balance Adjustments Balance Statement Balance Sheet
Account Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
                     
Cash 446,000       446,000       446,000  
Accounts
Receivable 50,000       50,000       50,000  
Capital   400,000       400,000       400,000
Service Income   106,000 56,000     50,000   50,000    
Rent Expense 10,000       10,000   10,000      
Total 506,000 506,000                
                     
Unearned
Service Income       56,000   56,000       56,000
Utilities Expense     1,500   1,500         1,500
Accrued Utilities       1,500   1,500 1,500      
Salaries Expense     12,000   12,000          
Accrued Salaries           12,000 12,000     12,000
Total     69,500 69,500 463,500 463,500 23,500 50,000 496,000 469,500
Net Income             26,500     26,500
Total             50,000 50,000 496,000 496,000

II. REFERENCES:
 Fundamentals of Accounting by Dr. William B. Baltazar, CPA, AFBE
 Basic Accounting for Non-Accountants by Philip T. Abitang, CPA, Benigno A. Castillo, MABE, Charlene U. Escario, MBA,
CB, Anselmo P. Castro, MBA, Melba S. Asuncion, DBA
III. REQUIREMENTS:
Direction: Prepare adjusting entries and Worksheet of Sassy Mo Beauty Salon based on the following data below.

Sassy Mo Beauty Salon

Adjusted Trial Balance
As of January 31, 2012
     
Account Title Debit Credit
     
Cash 15,430  
Accounts Receivable 5,900  
Office Supplies 4,320  
Prepaid Rent 24,000  
Equipment 80,000  
Accumulated Depreciation   1,100
Accounts Payable   5,200
Notes Payable   20,000
Utilities Payable   3,964
Interest Payable   150
Mo, Capital   100,000
Mo, Drawing 5,000  
Service Revenue   86,600
Wages Expense 38,200  
Advertising Expense 5,000  
Utilities Expense 3,964  
Miscellaneous Expense 3,470  
 Supplies Expense 18,480  
Rent Expense 12,000  
Depreciation Expense 1,100  
Interest Expense 150  
Total 217,014 217,014

Adjustments:
1. Office supplies having original cost P4,320 were unused till end of the period. Office supplies having original cost
of P22,800 are shown on unadjusted trial balance.
2. Prepaid rent of P36,000 was paid for the months January, February and March.
3. The equipment costing P80,000 useful life of 5 years and its estimated salvage value is P14,000.
4. The interest rate on P20,000 note payable is 9%. Accrue the interest for one month.