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    4 Completing The Accounting Cycle Part

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    Talion
    This document shows a trial balance worksheet for a company with the following information: 1) Current liabilities of $7,900 including notes payable, accounts payable, and interest payable. 2) Long-term liabilities of $35,000 in notes payable for total liabilities of $42,900. 3) Owner's equity of $27,600, which is owner's original capital of $30,000 less drawings of $1,000 and a net loss of $1,400. The worksheet summarizes the company's balance sheet accounts to calculate total liabilities and owner's equity of $70,500.

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    4 Completing The Accounting Cycle Part

    Uploaded by

    Talion
    26 views1 page
    This document shows a trial balance worksheet for a company with the following information: 1) Current liabilities of $7,900 including notes payable, accounts payable, and interest payable. 2) Long-term liabilities of $35,000 in notes payable for total liabilities of $42,900. 3) Owner's equity of $27,600, which is owner's original capital of $30,000 less drawings of $1,000 and a net loss of $1,400. The worksheet summarizes the company's balance sheet accounts to calculate total liabilities and owner's equity of $70,500.

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    4 Completing the Accounting Cycle Part (39)

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    This document shows a trial balance worksheet for a company with the following information: 1) Current liabilities of $7,900 including notes payable, accounts payable, and interest payable. 2) Long-term liabilities of $35,000 in notes payable for total liabilities of $42,900. 3) Owner's equity of $27,600, which is owner's original capital of $30,000 less drawings of $1,000 and a net loss of $1,400. The worksheet summarizes the company's balance sheet accounts to calculate total liabilities and owner's equity of $70,500.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    26 views1 page

    4 Completing The Accounting Cycle Part

    Uploaded by

    Talion
    This document shows a trial balance worksheet for a company with the following information: 1) Current liabilities of $7,900 including notes payable, accounts payable, and interest payable. 2) Long-term liabilities of $35,000 in notes payable for total liabilities of $42,900. 3) Owner's equity of $27,600, which is owner's original capital of $30,000 less drawings of $1,000 and a net loss of $1,400. The worksheet summarizes the company's balance sheet accounts to calculate total liabilities and owner's equity of $70,500.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    Questions 4-39

    Liabilities and Owner’s Equity


    Current liabilities
    Notes payable $ 5,000
    Accounts payable 2,400
    Interest payable 500
    Total current liabilities $ 7,900
    Long-term liabilities
    Notes payable 35,000
    Total liabilities 42,900
    Owner’s equity
    Owner’s capital 27,600*
    Total liabilities and owner’s equity $70,500
    *Owner’s capital $30,000 less drawings $1,000 and net loss $1,400.

    c.
    Aug. 31 Service Revenue 4,900
    Income Summary 4,900
    (To close revenue account)
    31 Income Summary 6,300
    Salaries and Wages Expense 3,200
    Depreciation Expense 900
    Utilities Expense 800
    Interest Expense 500
    Advertising Expense 400
    Supplies Expense 300
    Insurance Expense 200
    (To close expense accounts)
    31 Owner’s Capital ($6,300 − $4,900) 1,400
    Income Summary 1,400
    (To close net loss to capital)
    31 Owner’s Capital 1,000
    Owner’s Drawings 1,000
    (To close drawings to capital)

    Brief Exercises, DO IT! Exercises, Exercises, Problems, and many additional resources are
    available for practice in WileyPLUS.

    Note: All asterisked Questions, Exercises, and Problems relate to material in the appendix to the chapter.

    Questions

    1. “A worksheet is a permanent accounting record and its use is the net income of $12,000 appear? When expenses exceed revenues,
    required in the accounting cycle.” Do you agree? Explain. in which columns will the difference appear?
    2. Explain the purpose of the worksheet. 5. Why is it necessary to prepare formal financial statements if all of
    3. What is the relationship, if any, between the amount shown in the the data are in the statement columns of the worksheet?
    adjusted trial balance column for an account and that account’s ledger 6. Identify the account(s) debited and credited in each of the four
    balance? closing entries, assuming the company has net income for the year.
    4. If a company’s revenues are $125,000 and its expenses are 7. Describe the nature of the Income Summary account and identify
    $113,000, in which financial statement columns of the worksheet will the types of summary data that may be posted to this account.

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