Quiz 3: P3: Merchandising Company Worksheet P2-work


Adjusted trial balance: Adjusted trial balance is a worksheet that include the balances of all the accounts that are reported to the financial statements. It is prepared after the trial balance and the adjusting entries are being made. It is used as a working paper for the preparation of financial statements but is not considered as a financial statement in itself. It is a type of worksheet which is prepared at the end of the accounting period. Complete the worksheet as follows: img Thus, the total of adjusted trial balance is $444,232. Prepare the above-mentioned worksheet with excel formulae as follows: img

In the worksheet, record the following transactions for adjusting entries: a. The store supplies on hand at the end of the fiscal year is $450. The balance in trial balance for store supplies is $2,370. This means that $1,920 in supplies was used and needs to be adjusted. Debit supplies expense and credit store supplies for $1,920. b. Insurance premiums used during the year are $2,420. Debit insurance expense and credit prepaid insurance. c. Depreciation on the company's equipment is $1,500. Debit depreciation expense and credit accumulated depreciation. d. Prepaid rent of $1,200 is included in the rent expense for the first month in the next fiscal year. Debit prepaid rent and credit rent expense. e. Wages earned by employees but not yet paid are $1,440. Debit salaries expense and credit salaries payable. f. The value of merchandise inventory at the end of the fiscal year is $68,864. First we will clear out merchandise inventory so we will debit income summary and credit inventory for the beginning balance of $47,964. Secondly, to reflect the ending balance in inventory, debit inventory and credit income summary for $68,864. In adjusted trial balance, the total of debits should be equal to the total of credits. In order to determine this, a formula will be entered to add all the numbers in all columns. The spreadsheet after recording all the transactions and entering all the formulas is shown below: img

In the worksheet, the information will be transferred in the appropriate column of adjusted trial balance, income statement, or balance sheet using cell references. A formula will be used at the end of both columns to calculate the totals of each column. The complete spreadsheet is shown below: img Notice how debits equal credits and Company S has a net income of $37,902.

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