Chapter 15 Work Sheet for a Merchandising Businessweb.eccrsd.us/dawson/public/acct1chapter15pp.pdf · Work Sheet for a Merchandising Business ... A columnar accounting form used to

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Educational Publishing

Chapter 15

Work Sheet for a Merchandising Business

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Creating a Work Sheet

  Work sheet   A columnar accounting form used to summarize the

general ledger information needed to prepare financial statements.

  Accountants use a work sheet for four reasons: 1.  To summarize General Ledger Account balances 2.  To plan changes to GL accounts to bring them up to

date. 3.  To separate GL accounts according to financial

statements to prepare. 4.  To calculate the amount of Net Income/Net Loss

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Preparing a Trial Balance on a Work Sheet

  Journals and Ledgers are permanent records.

  A Work Sheet is a planning tool.

  Trial Balance (TB)   A proof of the equality of debits and credits in a

general ledger.

  Information for the trial balance is taken from the general ledger.

  Account titles are listed on a Trial Balance in the same order as listed on the chart of accounts.

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3 3. Total, prove, and rule

the debit and credit columns.

1. Write the titles of the general ledger accounts.

2. Write the balance of each account.

1

1 2

2

TRANSFERRING GENERAL LEDGER ACCOUNT BALANCES TO A WORK SHEET

RECORDING A TRIAL BALANCE ON A WORK SHEET

Lesson 15-1, page 374-375

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Planning Adjustments on a Work Sheet

  In order to give accurate information on financial statements, some general ledger accounts must be brought up to date at the end of a fiscal period.

  Adjustments   Changes recorded on a work sheet to update general

ledger accounts at the end of a fiscal period.

  Adjustment need to be made to supplies accounts, prepaid insurance account, and merchandise inventory account.

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Planning Adjustments on a Work Sheet

  Inventory   The amount of goods on hand.

  Merchandise Inventory   The amount of goods on hand for sale to customers.

  Merchandise Inventory Account –  Asset Account with a Normal Debit balance. –  The amount in this account does not change during

the year for sales and purchases. –  The account needs to be adjusted at the end of the

fiscal period to reflect the changes. –  Merchandise Inventory and Income Summary are the

accounts used for the adjustment

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PLANNING ADJUSTMENTS ON A WORK SHEET

Jan. 1 Bal. 270,480.00

Merchandise Inventory

Debit Credit Merchandise Inventory

Lesson 15-1, page 376

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BEFORE ADJUSTMENT AFTER ADJUSTMENT

Income Summary

Jan 1 Bal. Jan 1 Bal. 270,480.00 (New Bal. 254,640.00)

ANALYZING A MERCHANDISE INVENTORY ADJUSTMENT

Adj. (a) 15,840.00


Adj. (a) 15,840.00


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RECORDING A MERCHANDISE INVENTORY ADJUSTMENT

1 2

3. Label the two parts of this adjustment.

1. Write the debit amount. 2. Write the credit amount.

3


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BEFORE ADJUSTMENT

ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN BEGINNING MERCHANDISE INVENTORY

AFTER ADJUSTMENT

Income Summary

Jan 1 Bal. 294,700.00 Adj. (a) 4,200.00


Adj. (a) 4,200.00


(New Bal. 298,900.00)

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15-1 Assignments

  p. 379 Audit Your Understanding

  p. 379 (p. 347) Work Together

  p. 379 (p. 348) On Your Own

  p. 394 (p. 351) Application Problem 15-1

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Chapter 15-2

Analyzing and Recording Work Sheet Adjustments

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Dec. 31 Bal. Dec. 31 Bal. 6,480.00

Supplies Expense—Office

(New Bal. 1,750.00)

ANALYZING A SUPPLIES ADJUSTMENT

Adj. (b) 4,730.00

Supplies—Office

Adj. (b) 4,730.00


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RECORDING SUPPLIES ADJUSTMENTS

1

3

3

2


1. Write the debit amounts. 2. Write the credit amounts.


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Dec 31 Bal. Dec 31 Bal. 5,800.00

Insurance Expense

(New Bal. 2,630.00)

ANALYZING A PREPAID INSURANCE ADJUSTMENT

Adj. (d) 3,170.00

Prepaid Insurance

Adj. (d) 3,170.00


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RECORDING A PREPAID INSURANCE ADJUSTMENT

1 3

3 2


1. Write the debit amount. 2. Write the credit amount.


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15-2 Assignments



  p. 385 (p. 348) On Your Own


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Chapter 15-3

Completing Work Sheets

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4. Calculate net income or net loss.

5. Extend net income or net loss to Balance Sheet Debit or Credit column.

1. Extend balance sheet items to Balance Sheet columns.

2. Extend income statement items to Income Statement columns.

COMPLETING AN 8-COLUMN WORK SHEET

2 1

3. Total Income Statement and Balance Sheet columns.

6. Total Income Statement and Balance Sheet columns.

7. Check that totals are in balance.

4 3

5

6 7 Lesson 15-3, page 386

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A 10-COLUMN WORK SHEET FOR A MERCHANDISING BUSINESS (LEFT PAGE)

1. Record the trial balance.

2. Plan the adjustments. 1 2


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A 10-COLUMN WORK SHEET FOR A MERCHANDISING BUSINESS (RIGHT PAGE)

3. Extend the balances in the Trial Balance columns to the Adjusted Trial Balance columns.

4. Total, prove, and rule the Adjusted Trial Balance columns.

3

4

5

6

5. Extend the amounts in the Adjusted Trial Balance columns to the appropriate Income Statement and Balance Sheet columns.

6. Total, prove, and rule the appropriate Income Statement and Balance Sheet columns.


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15-3 Assignments



  p. 392 (p. 348) On Your Own


  p. 395 (p. 358) Mastery Problem 15-4

Documents

Chapter 15 Work Sheet for a Merchandising Businessweb.eccrsd.us/dawson/public/acct1chapter15pp.pdf · Work Sheet for a Merchandising Business ... A columnar accounting form used to