Ch04 WRD25e Instructor

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g t h e

p le ti n
m
Co ing Cy c l e
oun t r 4
Ac c a p t e
C h
c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives

1. Describe the flow of accounting information from


the unadjusted trial balance into the adjusted trial
balance and financial statements.
2. Prepare financial statements from adjusted account
balances.
3. Prepare closing entries.
4. Describe the accounting cycle.
5. Illustrate the accounting cycle for one period.
Learning Objectives

6. Explain what is meant by the fiscal year and the


natural business
7. Describe and illustrate the use of working capital
and the current ratio in evaluating a company’s
financial condition.
Learn
i ng O
bject
i ve
balan
D
infor escribe t
matio
o he fl
lo
ce in n from th w of acco
to the e una
1
adjus djust unting
and f t ed t r ed t r i
inanc ial ba al
ial sta lance
teme
nts.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
FLOW OF ACCOUNTING
INFORMATION
Flow of Accounting Information

End-of-Period Spreadsheet (Work Sheet)

Unadjusted TB Adjustments Adjusted TB


Accounts Dr Cr Dr Cr Dr Cr

o Account balances are listed in the Unadjusted Trial


Balance column using the ending balances found in the
general ledger.
(continued)
Flow of Accounting Information

End-of-Period Spreadsheet (Work Sheet)

Unadjusted TB Adjustments Adjusted TB


Accounts Dr Cr Dr Cr Dr Cr

o Adjustments are entered here. Two possibilities:


 Deferrals – Existing balances are changed
 Accruals – New information is entered
(continued)
Flow of Accounting Information

End-of-Period Spreadsheet (Work Sheet)

Unadjusted TB Adjustments Adjusted TB


Accounts Dr Cr Dr Cr Dr Cr

 Adjustments are combined with the unadjusted trial balance


amounts. Account balances are now adjusted.
(continued)
Flow of Accounting Information

End-of-Period Spreadsheet (Work Sheet)

Adjusted TB Income State. Balance Sheet


Accounts Dr Cr Dr Cr Dr Cr

o Revenue and expense balances in


the Adjusted Trial Balance column are extended to
the Income Statement column.
(continued)
Flow of Accounting Information

End-of-Period Spreadsheet (Work Sheet)

Adjusted TB Income State. Balance Sheet


Accounts Dr Cr Dr Cr Dr Cr

o Asset, liability, owner’s equity, and drawing balances


in the Adjusted Trial Balance column are extended to
the Balance Sheet column.
(concluded)
Learn
i ng O
bj e ct i ve
Prepa
re fin
anci
adjus ial statem
t ed a c e
2
coun nts from
t bala
nces.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Income Statement

o The income statement is prepared directly from the


Income Statement or Adjusted Trial Balance columns
of the end-of-period spreadsheet (work sheet)
beginning with fees earned of $16,840.
FINANCIAL STATEMENT
PREPARATION FROM
END-OF-PERIOD SPREADSHEET
– INCOME STATEMENT

to statement of owner’s equity


Statement of Owner’s Equity

o The first item presented on the statement of owner’s


equity is the balance of the owner’s capital account
at the beginning of the period.
FINANCIAL STATEMENT
PREPARATION FROM END-OF-
PERIOD
SPREADSHEET – STATEMENT
OF OWNER’S EQUITY
from the income statement

to the balance sheet


Balance Sheet

o The balance sheet is prepared directly from the


Balance Sheet or Adjusted Trial Balance columns of
the end-of-period spreadsheet (or work sheet),
beginning with Cash of $2,065.
FINANCIAL STATEMENT
PREPARATION FROM
END-OF-PERIOD SPREADSHEET
– BALANCE SHEET
from the statement of owner’s equity
Classified Balance Sheet

o A classified balance sheet is a balance sheet that was


expanded by adding subsections for (1) current
assets, (2) property, plant, and equipment, (3) current
liabilities, and (4) long-term liabilities.
CURRENT ASSETS

Cash and other assets that  Cash


are expected to be
converted into cash, sold,  Accounts
Receivable
or used up usually within a
year or less, through the  Notes Receivable
normal operations of the
business, are called current  Supplies
assets.
Notes Receivable

o Notes receivable are written promises by the


customer to pay the amount of the note and possibly
interest at an agreed rate.
FIXED ASSETS

Property, plant, and equipment  Equipment


(also called fixed assets or
plant assets) include assets  Machinery
that depreciate over a period  Buildings
of time. Land is an exception,
since it is not subject to
 Land
depreciation.
CURRENT LIABILITIES

Liabilities that will be due  Accounts payable


within a short time (usually
one year or less) and that  Wages payable
are to be paid out of  Interest payable
current assets are called
current liabilities.
 Unearned fees
LONG-TERM LIABILITIES

Liabilities not due for a  Long-term notes


long time (usually more payable
than one year) are called
long-term liabilities.  Mortgage payable
 Bond payable
Owner’s Equity

o Owner’s equity is the owner’s right to the assets of


the business. Owner’s equity is added to the total
liabilities, and this combined total must be equal to
the total assets.
Learn
i ng O
bject
i ve
Prep ar e c l
osing
entrie
3
s.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Closing Entries

o Accounts that are relatively permanent from year to


year are called permanent accounts or real accounts.
These accounts are carried forward from year to
year.
Closing Entries

o Accounts that report amounts for only one period are


called temporary accounts or nominal accounts.
Temporary accounts are not carried forward because
they relate to only one period.
Closing Entries

o To report amounts for only one period, temporary


accounts should have zero balances at the beginning
of the next period.
o To achieve this, the revenue and expense account
balances are transferred to Income Summary at the
end of the period.
Closing Entries

o The balance of Income Summary (net income or net


loss) is then transferred to the owner’s capital
account.
o The balance of the owner’s drawing account is also
transferred to the owner’s capital account.
o The entries that transfer these balances are called
closing entries.
CLOSING
ENTRIES
Closing Entries

o Income Summary is a temporary account that is only


used during the closing process.
o At the end of the closing process, the Income
Summary account will have a zero balance.
o Income Summary is sometimes called a clearing
account.
JOURNALIZING AND
POSTING CLOSING
ENTRIES
JOURNALIZING AND
POSTING CLOSING
ENTRIES
JOURNALIZING AND
POSTING CLOSING
ENTRIES
JOURNALIZING AND
POSTING CLOSING
ENTRIES
CLOSING
ENTRIES

Step 1

Step 2

Step 3

Step 4
Temporary Account Balances

o After the closing entries are posted, all of the


temporary accounts have zero balances.
LEDGER

(continued)
LEDGER

(continued)
LEDGER

(continued)
LEDGER
LEDGER

(concluded)
Post-Closing Trial Balance

o A post-closing trial balance is prepared after the


closing entries have been posted. The purpose of the
post-closing (after closing) trial balance is to verify
that the ledger is in balance at the beginning of the
next period.
POST-CLOSING
TRIAL BALANCE
Learn
i ng O
bject
i v e
Desc
r i be t
he e ac co
untin
g cyc
4
l e.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Accounting Cycle

o The accounting process that begins with analyzing


and journalizing transactions and ends with
preparing the accounting records for the next
period’s transactions is called the accounting cycle.
There are ten steps in the accounting cycle.
Accounting Cycle

1. Transactions are analyzed and recorded in the


journal.
2. Transactions are posted to the ledger.
3. An unadjusted trial balance is prepared.
4. Adjustment data are assembled and analyzed.
5. An optional end-of-period spreadsheet (work
sheet) is prepared.

(continued)
Accounting Cycle

6. Adjusting entries are journalized and posted to the


ledger.
7. An adjusted trial balance is prepared.
8. Financial statements are prepared.
9. Closing entries are journalized and posted to the
ledger.
10. A post-closing trial balance is prepared.
ACCOUNTING
CYCLE

to the
financial
statements
ACCOUNTING
CYCLE
From the adjusted
trial balance
Learn
i ng O
bj e ct
Illust
i ve
rate t
he a c
coun
ting c
ycle f
or on
5
perio e
d.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
ACCOUNTING
CYCLE

(continued)
ACCOUNTING
CYCLE

(continued)
ACCOUNTING
CYCLE

(concluded)
ACCOUNTING
CYCLE
UNADJUSTED
TRIAL BALANCE
END-OF-PERIOD
SPREADSHEET
ADJUSTING
ENTRIES
ADJUSTED TRIAL
BALANCE
INCOME
STATEMENT

(continued)
STATEMENT OF
OWNER’S EQUITY

(continued)
BALANCE SHEET

(concluded)
CLOSING
ENTRIES
POST-CLOSING
TRIAL BALANCE
LEDGER

(continued)
(continued)
LEDGER

(continued)
LEDGER

(concluded)
Learn
i ng O
Expla bj ectiv
in wh
at i s m
ea n
e 6
and t t by t
he natur he fiscal
al bu
sines year
s yea
r.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Accounting Period

o The annual accounting period adopted by a business


is known as its fiscal year.
o When a business adopts a fiscal year that ends when
business activities have reached the lowest point in its
annual operation, such a fiscal year is also called the
natural business year.
ACCOUNTING
PERIOD
FINANCIAL
HISTORY OF A
BUSINESS
Learn
i ng O
bj e ct i v e
work D e
ing c
s
ap
cribe
a nd ill
evalu pital and t lustrate th
ating he cu e use
7
a com rre of
pany nt ratio in
’s fin
a
condi ncial
tion.

c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Working Capital and Current Ratio

o The ability to convert assets into cash is called


liquidity.
Working Capital and Current Ratio

o The ability of a business to pay its debts is called


solvency.
Working Capital and Current Ratio

o Working capital is the excess of the current assets of


a business over its current liabilities.
Working Capital and Current Ratio

o NetSolutions’ working capital at the end of 2013 is


$6,355 as computed below. This amount of working
capital implies that NetSolutions is able to pay its
current liabilities.

Working Capital = Current Assets – Current liabilities


= $7,745 – $1,390
= $6,355
Working Capital and Current Ratio

o The current ratio is another means of expressing the


relationship between current assets and current
liabilities. The current ratio is computed by dividing
current assets by current liabilities.
Working Capital and Current Ratio

o The current ratio for NetSolutions at the end of 2013


is 5.6, computed as follows:

Current Assets
Current Ratio =
Current Liabilities
$7,745
=
$1,390
= 5.6 (Rounded)
en d ix:
App
erri odd
--oof - P et
E n d dsshh e
S p
p r e a
c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220
3 Supplies 2,000
4 Prepaid Insurance 2,400
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr.
8 Accounts Payable 900 The
9 Wages Payable
10 Unearned Rent 360 unadjusted
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000 trial balance
13 Fees Earned 16,340 is checked
14 Rent Revenue
15 Wages Expense 4,275 for equality.
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800
20 Insurance Expense
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 81
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220 Supplies
3 Supplies 2,000
4 Prepaid Insurance 2,400
needs
5 Land 20,000 adjusting
6 Office Equipment 1,800
7 Accumulated Depr.
8 Accounts Payable 900
9 Wages Payable
10 Unearned Rent 360
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000
13 Fees Earned 16,340
14 Rent Revenue
15 Wages Expense 4,275
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800
20 Insurance Expense
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 82
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (a) Cost of
8 Accounts Payable 900 supplies on
9 Wages Payable hand at
10 Unearned Rent 360 December 31
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000 is $760.
13 Fees Earned 16,340
14 Rent Revenue
15 Wages Expense 4,275
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 83
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (b) The insurance
8 Accounts Payable 900 expense for
9 Wages Payable December is
10 Unearned Rent 360 $200 ($2,400 ÷
11 Chris Clark, Capital 25,000
12).
12 Chris Clark, Drawing 4,000
13 Fees Earned 16,340
14 Rent Revenue
15 Wages Expense 4,275
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 84
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (c) Rent
8 Accounts Payable 900 revenue
9 Wages Payable earned
10 Unearned Rent 360 (c) 120 during
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000 December
13 Fees Earned 16,340 was $120
14 Rent Revenue (c) 120 ($360 ÷ 3).
15 Wages Expense 4,275
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 85
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220 (d) 500
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (d) Fees accrued
8 Accounts Payable 900 at the end of
9 Wages Payable December,
10 Unearned Rent 360 (c) 120 but not
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000 recorded,
13 Fees Earned 16,340 (d) 500 totaled $500.
14 Rent Revenue (c) 120
15 Wages Expense 4,275
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 86
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220 (d) 500
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (e) Wages
8 Accounts Payable 900 accrued, but
9 Wages Payable (e) 250 not paid, at
10 Unearned Rent 360 (c) 120 the end of
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000 December
13 Fees Earned 16,340 (d) 500 totaled $250.
14 Rent Revenue (c) 120
15 Wages Expense 4,275 (e) 250
16 Rent Expense 1,600
17 Depreciation Expense
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 87
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220 (d) 500
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (f) 50 (f) Depreciation
8 Accounts Payable 900 of office
9 Wages Payable (e) 250
10 Unearned Rent 360 (c) 120 equipment is
11 Chris Clark, Capital 25,000 $50 for
12 Chris Clark, Drawing 4,000 December.
13 Fees Earned 16,340 (d) 500
14 Rent Revenue (c) 120
15 Wages Expense 4,275 (e) 250
16 Rent Expense 1,600
17 Depreciation Expense (f) 50
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22 42,600 42,600
23
24
25 88
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065
2 Accounts Receivable 2,220 (d) 500
3 Supplies 2,000 (a) 1,240
4 Prepaid Insurance 2,400 (b) 200
5 Land 20,000
6 Office Equipment 1,800
7 Accumulated Depr. (f) 50
8 Accounts Payable 900
9 Wages Payable (e) 250
10 Unearned Rent 360 (c) 120
11 Chris Clark, Capital 25,000
12 Chris Clark, Drawing 4,000
13 Fees Earned 16,340 (d) 500
14 Rent Revenue (c) 120
15 Wages Expense 4,275 (e) 250
16 Rent Expense 1,600
17 Depreciation Expense (f) 50
18 Utilities Expense 985
19 Supplies Expense 800 (a) 1,240
20 Insurance Expense (b) 200
21 Miscellaneous Exp. 455
22
Summed
42,600 42,600 2,360 2,360
23 and ruled
24
25 89
Add / Subtract Adjustments

o The next step is to add or subtract the adjustments to


(or from) the amounts found in the Unadjusted Trial
Balance columns and enter the results in the
Adjusted Trial Balance columns.
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065 2,065
2 Accounts Receivable 2,220 (d) 500 2,720
3 Supplies 2,000 (a) 1,240 760
4 Prepaid Insurance 2,400 (b) 200 2,200
5 Land 20,000 20,000
6 Office Equipment 1,800 1,800
7 Accumulated Depr. (f) 50 50
8 Accounts Payable 900 900
9 Wages Payable (e) 250 250
10 Unearned Rent 360 (c) 120 240
11 Chris Clark, Capital 25,000 25,000
12 Chris Clark, Drawing 4,000 4,000
13 Fees Earned 16,340 (d) 500 16,840
14 Rent Revenue (c) 120 120
15 Wages Expense 4,275 (e) 250 4,525
16 Rent Expense 1,600 1,600
17 Depreciation Expense (f) 50 50
18 Utilities Expense 985 985
19 Supplies Expense 800 (a) 1,240 2,040
20 Insurance Expense (b) 200 200
21 Miscellaneous Exp. 455 455
22 42,600 42,600 2,360 2,360 43,400 43,400
23
24
25 91
Spreadsheet

o Preparing the work sheet as a spreadsheet allows the


computer to assist you in the process. The
spreadsheet illustrated in Exhibit 1 has been
reproduced on the next slide.
Extending Amounts to Statement Columns

o The next step is to extend amounts in the Adjusted


Trial Balance columns to the Income Statement and
Balance Sheet columns. Because of space limitations,
the unadjusted trial balance and the adjustments
columns have been removed for the remainder of this
slide presentation.
Adjusted
Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065 2,065
2 Accounts Receivable 2,720 2,720
3 Supplies 760 760
4 Prepaid Insurance 2,200 2,200
5 Land 20,000 20,000
6 Office Equipment 1,800 1,800
7 Accumulated Depr. 50 50
8 Accounts Payable 900 900
9 Wages Payable 250 250
10 Unearned Rent 240 240
11 Chris Clark, Capital 25,000 25,000
12 Chris Clark, Drawing 4,000 4,000
13 Fees Earned 16,840 16,840
14 Rent Revenue 120 120
15 Wages Expense 4,525 4,525
16 Rent Expense 1,600 1,600
17 Depreciation Expense 50 50
18 Utilities Expense 985 985
19 Supplies Expense 2,040 2,040
20 Insurance Expense 200 200
21 Miscellaneous Exp. 455 455
22 43,400 43,400
23
24
25 95
Adjusted
Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065 2,065
2 Accounts Receivable 2,720 2,720
3 Supplies 760 760
4 Prepaid Insurance 2,200 2,200
5 Land 20,000 20,000
6 Office Equipment 1,800 1,800
7 Accumulated Depr. 50 50
8 Accounts Payable 900 900
9 Wages Payable 250 250
10 Unearned Rent 240 240
11 Chris Clark, Capital 25,000 25,000
12 Chris Clark, Drawing 4,000 4,000
13 Fees Earned 16,840 16,840
14 Rent Revenue 120 120
15 Wages Expense 4,525 4,525
16 Rent Expense 1,600 1,600
17 Depreciation Expense 50 50
18 Utilities Expense 985 985
19 Supplies Expense 2,040 2,040
20 Insurance Expense 200 200
21 Miscellaneous Exp. 455 455
22 43,400 43,400 9,855 16,960 33,545 26,440
23
24
25 The four columns are summed. 96
Determining Net Income (Net Loss)

Income Statement Balance Sheet

9,855 16,960 33,545 26,440


7,105 7,105
16,960 16,960 33,545 33,545

Net Income

o The difference between the Income Statement column


totals and Balance Sheet column totals is net income (or
net loss) for the period.
Adjusted
Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
1 Cash 2,065 2,065
2 Accounts Receivable 2,720 2,720
3 Supplies 760 760
4 Prepaid Insurance 2,200 2,200
5 Land 20,000 20,000
6 Office Equipment 1,800 1,800
7 Accumulated Depr. 50 50
8 Accounts Payable 900 900
9 Wages Payable 250 250
10 Unearned Rent 240 240
11 Chris Clark, Capital 25,000 25,000
12 Chris Clark, Drawing 4,000 4,000
13 Fees Earned 16,840 16,840
14 Rent Revenue 120 120
15 Wages Expense 4,525 4,525
16 Rent Expense 1,600 1,600
17 Depreciation Expense 50 50
18 Utilities Expense 985 985
19 Supplies Expense 2,040 2,040
20 Insurance Expense 200 200
21 Miscellaneous Exp. 455 455
22 43,400 43,400 9,855 16,960 33,545 26,440
23 Net income 7,105 7,105
24 16,960 16,960 33,545 33,545
25 98
g t h e
p le ti n
m
Co ing Cy c l e
oun t n d
Ac c e
e E
Th
c. 2014 Cengage Learning.   All Rights Reserved.  May not be copied, scanned, or duplicated, or posted to a publicly accessible website, in whole or in part.

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