Tonights Agenda

1
Tonights Agenda

• Adjusting Entries
• Closing Entries
• How to complete Billy
• Exam review tomorrow Wehner 159 845 pm

2
Adjusting Entries - depreciation

• Depreciation Expense should be calculated using
  the following useful lives
• Different lives for everyone
• Use Straight-line method
• Depreciation Expense XX
• Accumulated Depreciation XX

3
Adjusting Entries

• 2. Dont have to worry about this, it is very
  important but not relevant to an actual entry.

4
Adjusting Entries number 2

• The interest accrued but not paid on the note
  payable to the Stamford State Bank was 100 at
  January 31.
• Interest Expense increases
• Interest Payable increases

5
Adjusting Entries number 4.

• The cost of office supplies on hand at January 31
  was 150 or 50
• If that is whats left, what was used?
• Expense what was used
• Supplies Expense increases
• Supplies decreases

6
Adjusting Entry number 5

• Salaries earned by employees but unpaid at
  January 31 totaled 500 or 600
• Salaries expense increases
• Salaries Payable increases

7
Adjusting Entries number 6

• Utilities Billed but not paid at January 31,
  totaled
• Utilities expense increases
• Utilities payable increases

8
3 Hidden entries

• See ordinary entries for three time-based
  transactions
• But I will find them for you.
• Rent
• Rent expense increases
• Prepaid rent decreases
• Unearned Revenue
• Unearned Revenue decreases
• Revenue increases

9
Last hidden entry

• Couldnt fit on one slide so made another, but
  not more important.
• Insurance Policy
• Insurance Expense increased
• Insurance policy decreased

10
Closing Entries
Income Summary
Dividends
Retained Earnings
11
Closing Entries

• To close revenues
• Dr. Revenue XX
• Cr. Income summary XX
• To close expenses
• Dr. Income summary XX
• Cr. Expense xx
• Cr. Expense xx
• Cr. Expense xx

12
Closing Entries

• To close income summary
• Dr. Income summary XX
• Cr. Retained earnings XX
• To close dividends
• Dr. Retained earnings XX
• Cr. Dividends XX

13
14 step program-first three

• Make journal entries for original transactions
• Post to general ledger accounts
• Post to Trial balance
• Post totals
• Make sure left side total equals right

14
14 step program-next three

• Make journal entries for adjusting transactions
  and closing transactions
• Post to general ledger accounts
• Post to adjusting balance
• Post totals
• Create new accounts or next to old
• Make sure left side total equals right

15
14 step program-worksheet

• Create adjusted trial balance!
• Income statement
• Only revenue and expense accounts
• Retained Earnings
• NI-Div all investments (18,000)
• Balance Sheet
• Assets, Liabilities, Owners equity

16
14 step program-statements

• Balance Sheet
• Page 4-20, same as on worksheet
• Income Statement
• Page 4-18, same as on worksheet
• Statement of Retained Earnings (or Capital)
• Page 4-20, same as on worksheet (investment)
• Statement of Cash Flows
• Page 4-21, lots of options

17
14 step program-cash flows

• 14. Last step tips
• Cash flows from operations
• Cash flows from investments
• Cash flows from financing
• TOTAL Change in Cash XX