4

Completing
the
Accounting
Cycle

After studying this chapter, you should be

able to:
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.

After studying this chapter, you should be

able to:
4. Describe the accounting cycle.
5. Illustrate the accounting cycle for one
period.
6. Explain what is meant by the fiscal
year and the natural business year.
33

4-1

Objective
Objective 11
Describe the flow of accounting
information from the
unadjusted trial balance into the
adjusted trial balance and
financial statements.
4

4-1

4-1

Spreadsheet (Work Sheet)

Trial Balance

Accounts

Dr

Cr

Adjustments

Adjusted TB

Dr

Dr

Cr

Accounts are listed in the Trial Balance column

using the ending balance found in the general
ledger.

Cr

66

4-1

Spreadsheet (Work Sheet)

Trial Balance

Accounts

Dr

Cr

Adjustments

Adjusted TB

Dr

Dr

Cr

Cr

Adjustments are entered here. Two possibilities:

1. Deferrals Existing balances are changed.
2. Accruals New information is entered.

77

4-1

Spreadsheet (Work Sheet)

Trial Balance

Accounts

Dr

Cr

Adjustments

Adjusted TB

Dr

Dr

Cr

Cr

Adjustments are combined with

the trial balance. Account
balances are now adjusted.

88

4-1

Spreadsheet (Work Sheet)

Adjusted TB

Accounts

Dr

Cr

Income State.

Dr

Cr

Balance Sheet

Dr

Cr

Revenue and expense balances in the

Adjusted Trial Balance column are extended
to the Income Statement column.

99

4-1

Spreadsheet (Work Sheet)

Adjusted TB

Accounts

Dr

Cr

Income State.

Dr

Cr

Balance Sheet

Dr

Cr

Asset, liability, owners equity, and

drawing balances in the Adjusted
Trial Balance column are extended
10
10
to the Balance Sheet column.

4-1
Example Exercise 4-1
The balances for the accounts listed below appear in the
Adjusted Trial Balance columns of the end-of-period
spreadsheet (work sheet). Indicate whether each balance
should be extended to (a) an Income Statement column or
(b) a Balance Sheet column.
1. Ambar Dewi, Drawing
2. Utilities Expense
3. Accumulated Depreciation
Equipment
4. Unearned Rent

5.
6.
7.
8.

Fees Earned
Accounts Payable
Rent Revenue
Supplies

11

4-1

Follow My Example 4-1

1.
2.
3.
4.
5.
6.
7.
8.

Balance Sheet column

Income Statement column
Balance Sheet column
Balance Sheet column
Income Statement column
Balance Sheet column
Income Statement column
Balance Sheet column

For Practice: PE 4-1A, PE 4-1B

12

4-2

Objective
Objective 22
Prepare financial
statements from adjusted
account balances.
13

4-2

To balance
sheet

14

4-2

From statement of owner

equity

15

4-2
Example Exercise 4-2
In the Balance Sheet columns of the end-of-period
spreadsheet (work sheet) for Dahsyat Consulting Co. for the
current year, the Debit column total is Rp678,450,000 and
the Credit column total is Rp599,750,000 before the amount
of net income or net loss has been included. In preparing
the income statement from the end-of-period spreadsheet
(work sheet), what is the amount of net income or net loss?

16

4-2
Follow My Example 4-2
A net income of Rp78,700,000 (Rp678,450,000
Rp599,750,000) would be reported. When the Debit
column of the Balance Sheet columns is more than the
Credit column, net income is reported. If the Credit
column exceeds the Debit column, a net loss is reported.

For Practice: PE 4-2A, PE 4-2B

17

4-2
Example Exercise 4-3
Zaka Gading owns and operates Gading Employment
Services. On January 1, 2007, Zaka Gading, Capital had a
balance of Rp186,000,000. During the year, Zaka invested
an additional Rp40,000,000 and withdrew Rp25,000,000.
For the year ended December 31, 2007, Gading
Employment Services reported a net income of
Rp18,750,000. Prepare a statement of owners equity for
the year ended December 31, 2007.

18

4-2
Follow My Example 4-3
GADING EMPLOYMENT SERVICES
STATEMENT OF OWNERS EQUITY
For the Year Ended December 31, 2007
Zaka Gading, capital, January 1, 2007
Rp186,000,000
Additional investment during 2007
40,000,000
Total
Rp226,000,000
Withdrawals
Rp 25,000,000
Less net income
18,750,000
Decrease in owners equity
6,250,000
Zaka Gading, capital, December 31, 2007
Rp219,750,000

For Practice: PE 4-3A, PE 4-3B

19

4-2

A classified balance sheet is a

balance sheet that was expanded
by adding subsections for current
assets; property, plant, and
equipment; and current liabilities.

20

4-2

Cash and other assets that are expected

to be converted into cash, sold or used
up usually within a year or less,
through the normal operations of the
business are called current assets.
Cash
Accounts Receivable
Supplies
21

4-2

Notes receivable are written

promises by the customer to
pay the amount of the note
and possibly interest at an
agreed rate.

22

4-2

Property, plant, and equipment (also called

fixed assets) include assets that depreciate
over a period of time. Land is an exception
as it is not subject to depreciation.

Equipment
Machinery
Buildings
Land
23

4-2

Liabilities that will be due within a

short time (usually one year or less)
and that are to be paid out of current
assets are called current liabilities.

Accounts payable
Wages payable
Interest payable
Unearned fees
24

4-2

Liabilities not due for a long

time (usually more than one
year) are long-term liabilities.
Notes payable
Mortgage payable
Bond payable

25

4-2

Owners equity is the owners

right to the assets of the business.
Owners equity is added to the
total liabilities, and the total must
be equal to the total assets.

26

4-2
Example Exercise 4-4
The following accounts appear in the adjusted trial balance of
Mata Hati Consulting. Indicate whether each account would be
reported in the (a) current asset; (b) property, plant, and
equipment; (c) current liability, (d) long-term liability; or (e)
owners equity section of the December 31, 2007 balance sheet
of Hindsight Consulting.

1. Jaka Cahyadi, Capital

2. Notes Receivable (due
in 6 months)
3. Notes Payable (due in
2009)
4. Land

5. Cash
6. Unearned Rent
months)
7. Accumulated Depr.
Equipment
8. Accounts Payable

27
27

4-2
Follow My Example 4-4
1.
2.
3.
4.

Owners equity
Current asset
Long-term liability
Property, plant, and equip.

5.
6.
7.
8.

Current asset
Current liability
Property, plant, and equipment
Current liability

For Practice: PE 4-4A, PE 4-4B

28

4-3

Objective
Objective 33
Prepare closing
entries.
29

4-3

Accounts that are relatively

permanent from year to year are
called real accounts. Accounts
that report amounts for only one
period are called temporary
accounts or nominal accounts.
30

4-3

To report amounts for only one period,

temporary accounts should have zero
balances at the beginning of the
period. At the end of the period the
revenue and expense account balances
are transferred to Income Summary.
31

4-3

The balance of Income Summary is

then transferred to the owners capital
account. The balance of the owners
drawing account is also transferred to
the owners capital account. The
entries that transfer these balances are
called closing entries.
32

4-3

33
33

4-3

Debit each revenue account

for the amount of its balance,
and credit Income Summary
for the total revenue.
Fees Earned
Income Summary
16,960

16,840 Bal. 16,840

Rent Revenue
120 Bal.

(In Rp000)

120

34
34

4-3
Wages Expense
Bal.

4,525

4,525

Rent Expense
Bal.

1,600

Income Summary
9,855

16,960

1,600

Depreciation Expense
Bal.

50

50

Utilities Expense
Bal.

985

985

Supplies Expense
Bal.

2,040

2,040

Insurance Expense
Bal.

200

Bal.

455

200
Miscellaneous Expense
455

Debit Income Summary

for the total expenses
and credit each expense
account for its balance.
(In Rp000)

35
35

4-3
Income Summary
9,855
7,105

16,960

Cinta Cita, Capital

Bal. 25,000
7,105

Cinta Cita, Drawing

Bal.

Debit Income
Summary for the
amount of its balance
(in this case, the net
income) and credit the
capital account.

4,000

(In Rp000)

36
36

4-3

CintaCita, Capital
4,000

Bal. 25,000
7,105

Cinta Cita, Drawing

Bal.

4,000

4,000

Debit the capital

account for the
balance of the
drawing account,
and credit drawing
for the same
amount.
37
37

Closing Entries for SolusiNet

4-3

Step
Step 11
Step
Step 22

Step
Step 33
Step
Step 44

38

4-3

After the closing entries

are posted, all of the
temporary accounts have
zero balances.

39

4-3
4-4
Example Exercise 4-5
The following
accounts
in the adjusted
trialthe
balance
After
the accounts
have appear
been adjusted
at July 31,
end ofof
the
Hindsight
Indicate
whether
eachfrom
account
wouldof
be
fiscal
year,Consulting.
the following
balances
are taken
the ledger
reported
in the
(a) current asset; (b) property, plant, and
Ungu
Violet
Services
equipment;
current
liability, (d) long-term
liability; or (e)
Anisa (c)
Putri,
Capital
Rp615,850,000
owners
equity
section
of the December 31, 2007,
balance sheet
Anisa
Putri,
Drawing
25,000,000
of Hindsight
Consulting.
Fees Earned
380,450,000
Wages Expense
250,000,000
Rent Expense
65,000,000
Supplies Expense
18,250,000
Miscellaneous Expense
6,200,000

Journalize the four entries required to close the accounts.

40

4-3
Follow My Example 4-5
July 31

Fees Earned
Income Summary

380,450,000

31 Income Summary
Wages Expense
Rent Expense
Supplies Expense
Miscellaneous Expense

339,450,000

380,450,000
250,000,000
65,000,000
18,250,000
6,200,000

31 Income Summary
Anisa Putri, Capital

41,000,000

31 Terry Lambert, Capital

Anisa Putri, Drawing

25,000,000

41,000,000
25,000,000
41

For Practice: PE 4-5A, PE 4-5B

4-3

Exhibit 7 Post-Closing Trial Balance

SolusiNet
Post-Closing Trial Balance
December 31, 2007
Cash
2 065 000
Accounts Receivable
2 720 000
Supplies
760 000
Prepaid Insurance
2 200 000
Land
20 000 000
Office Equipment
1 800 000
Accumulated Depreciation
50
Accounts Payable
900
Wages Payable
250
Unearned Rent
240
Cinta Cita, Capital
28 105
29 545 000 29 545

000
000
000
000
000
000

42
42

4-4

Objective
Objective 44
Describe the
accounting cycle.
43

4-4

The accounting process that begins

with analyzing and journalizing
transactions and ends with preparing
the accounting records for the next
periods transactions is called the
accounting cycle. There are ten steps
in the accounting cycle.
44

The Accounting Cycle

4-4

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

45

4-4

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.
46

4-4
4-4
Example Exercise 4-6
The following
accounts
appear
trialcycle,
balance
of
From
the following
list of
stepsin
inthe
theadjusted
accounting
identify
Hindsight
Consulting.
Indicate whether each account would be
what
two steps
are missing.
reported
in the (a) current
asset; (b)
plant,
andjournal.
a. Transactions
are analyzed
andproperty,
recorded
in the
equipment;
(c) current
liability,to(d)
b. Transactions
are posted
thelong-term
ledger. liability; or (e)
owners
equity section
of the
Decemberand
31,analyzed.
2007, balance sheet
c. Adjustment
data are
assembled
of
Consulting.
d. Hindsight
An optional
end-of-period spreadsheet (work sheet) is

e.
f.
g.
h.

prepared.
Adjusting entries are journalized and posted to the
ledger.
Financial statements are prepared.
Closing entries are journalized and posted to the
ledger.
A post-closing trial balance is prepared.

47
21

4-4

Follow My Example 4-6

The following two steps are missing: (1) the

preparation of an unadjusted trial balance and (2)
the preparation of the adjusted trial balance. The
unadjusted trial balance should be prepared after
step (b). The adjusted trial balance should be
prepared after step (e).

For Practice: PE 4-6A, PE 4-6B

48

4-5

Objective
Objective 55
Illustrate the accounting
cycle for one period.
Refer to the textbook for
this extended illustration.
49

4-6

Objective
Objective 66
Explain what is meant by
the fiscal year and the
natural business year.
50

4-6

The annual accounting period adopted

by a business is known as its fiscal
year. 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 year.
51

Financial History of a Business

4-6

The financial history of a business may be

shown by a series of balance sheets and
income statements, as displayed below.

52
52

Appendix
Appendix
End-of-Period
Spreadsheet (Work Sheet)

53

The end-of-period spreadsheet (work

sheet) shown in the following slides
does not have the usual spreadsheet
headings due to space constraints.

54

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

900
360
25,000
16,340

Adjustments
Debit
Credit

Adjusted
Trial Balance
Debit
Credit

The
The
unadjusted
unadjusted
trial
trial balance
balance
isis checked
checked
for
for equality.
equality.

42,600

55
55

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Adjustments
Debit
Credit

Adjusted
Trial Balance
Debit
Credit

(a) 1,240

900
360
25,000
16,340

(a) 1,240

Cost
Cost of
of
supplies
supplies on
on
hand
hand at
at end
end
of
of period
period isis
Rp760,000.
Rp760,000.

42,600

56
56

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Adjustments
Debit
Credit

Adjusted
Trial Balance
Debit
Credit

(a) 1,240
(b) 200
900
360
25,000
16,340

(a) 1,240
42,600

(b) 200

Accounts are added as needed.

The
The
insurance
insurance
expense
expense for
for
December
December isis
Rp200,000
Rp200,000
(Rp2,400,00
(Rp2,400,00
0/12)
0/12)

57
57

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Adjustments
Debit
Credit

Adjusted
Trial Balance
Debit
Credit

(a) 1,240
(b) 200
900
360
25,000

(c)

120

16,340

(a) 1,240
42,600

Rent
Rent revenue
revenue
earned
earned
during
during
December
December
was
was
Rp120,000.
Rp120,000.

(b) 200
(c) 120

58
58

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Adjustments
Debit
Credit

Adjusted
Trial Balance
Debit
Credit

(a) 1,240
(b) 200
900
360
25,000
16,340

(c)

120

(d)

250

Wages
Wages
accrued
accrued but
but
not
not paid
paid at
at
the
the end
end of
of
December
December
totaled
totaled
Rp250,000.
Rp250,000.

(a) 1,240
42,600

(b) 200
(c)
(d)

120
250

59
59

(In Rp000)

Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable

Unadjusted
Trial Balance
Debit
Credit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Adjustments
Debit
Credit

(e)

900
360
25,000
16,340

(c)

(d)

500

(a) 1,240
(b) 200

120
(e)

500

(c)
(d)

120
250

250

(a) 1,240
42,600

Adjusted
Trial Balance
Debit
Credit

(b) 200

Fees
Fees accrued
accrued
at
at the
the end
end of
of
December
December
but
but not
not
recorded
recorded
total
total
Rp500,000.
Rp500,000.
60
60

(In Rp000)
Unadjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Credit

Adjustments
Debit

(e)

900
360
25,000
16,340

Adjusted
Trial Balance

(c)

(d)

500

Credit

(e) 500

(a) 1,240
42,600

(b) 200
(f)

50

Credit

(a) 1,240
(b) 200

120

250

Debit

(c)
(d)

120
250

(f)

50

Depreciation
Depreciation
of
of office
office
equipment
equipment isis
Rp50,000
Rp50,000 for
for
December.
December.
61
61

(In Rp000)
Unadjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Credit

900
360
25,000
16,340

Adjusted
Trial Balance

Adjustments
Debit

(e)

500

(c)

120

(d)

250

Credit

(a) 1,240
(b) 200

(e) 500

(a) 1,240
42,600

(b) 200
(f)

(c)
(d)

120
250

(f)

50

50

Debit

Credit

To
Tomake
make
more
more
space,
space,
lets
lets
remove
remove
the
the
heading.
heading.
62
62

Unadjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Summed
Summed
and
and
ruled
ruled

Credit

900
360
25,000
16,340

Adjusted
Trial Balance

Adjustments
Debit

(e)

500

(c)

120

(d)

250

Credit

Debit

Credit

(a) 1,240
(b) 200

(In Rp000)
(e) 500

(a) 1,240
42,600

(b) 200
(f)

50
2,360

(c)
(d)

120
250

(f)

50
2,360

63
63

The next step is to add or subtract

the adjustments from (to) the
amounts found in the Unadjusted
Trial Balance columns and enter
the results in the Adjusted Trial
Balance columns.
64

Unadjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Credit

900
360
25,000
16,340

Adjusted
Trial Balance

Adjustments
Debit

(e)

500

(c)

120

(d)

250

Credit

Debit

Credit

(a) 1,240
(b) 200

(e) 500

(In Rp000)

(a) 1,240
42,600

(b) 200
(f)

50
2,360

(c)
(d)

120
250

(f)

50
2,360

65
65

Unadjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,220
2,000
2,400
20,000
1,800

4,000
4,275
1,600
985
800
455
42,600

Credit

Adjustments
Debit

(e)

900
360
25,000
16,340

Adjusted
Trial Balance

(c)

(d)

500

Credit

(a) 1,240
(b) 200

(In Rp000)

250

(b) 200
(f)

2,065
2,720
760
2,200
20,000
1,800

120
(e) 500

(a) 1,240
42,600

Debit

50
2,360

(c)
(d)

120
250

(f)

50
2,360

4,000
4,525
1,600
985
2,040
455

Credit

900
240
25,000
16,840

200

120
250

50

66 50

43,400

43,400

66

Because of space
constraints, the Unadjusted
Trial Balance and the
Adjustments columns will
not be shown in the
following slides.
67

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

900
240
25,000

Debit

Credit

Balance Sheet
Debit

Credit

(In Rp000)

16,840

120
250
50
43,400

68
68

The next step is to

extend amounts in the
Adjusted Trial Balance
columns to the Income
Statement and Balance
Sheet columns.
69

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

Balance Sheet
Debit

Credit

900
240
25,000
16,840

(In Rp000)

120
250
50
43,400

70
70

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

120
250
50
43,400

Debit

Credit

2,065
2,720
760
2,200
20,000
1,800

900
240
25,000
16,840

Balance Sheet

4,525
1,600
985
2,040
455
200

16,840

4,000

900
240
25,000

(In Rp000)
120

250

50

71 50
71

The Income
Statement and
Balance Sheet
columns are totaled.
72

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

120
250
50
43,400

Debit

Credit

2,065
2,720
760
2,200
20,000
1,800

900
240
25,000
16,840

Balance Sheet

4,525
1,600
985
2,040
455
200

16,840

4,000

900
240
25,000

(In Rp000)

120

250

50

73 50
73

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

120
250
50
43,400

Debit

Credit

2,065
2,720
760
2,200
20,000
1,800

900
240
25,000
16,840

Balance Sheet

4,525
1,600
985
2,040
455
200

16,840

4,000

(In Rp000)
120

250

50
9,855

900
240
25,000

16,960

33,545

74

74 50

26,440

The net income or net

loss is determined. Then
the Income Statement
and Balance Sheet
columns are totaled and
double-ruled.
75

Adjusted
Trial Balance
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation

Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

120
250
50
43,400

Debit

Credit

2,065
2,720
760
2,200
20,000
1,800

900
240
25,000
16,840

Balance Sheet

4,525
1,600
985
2,040
455
200

16,840

4,000

(In Rp000)

120

250

50
9,855

900
240
25,000

16,960

33,545

76

76 50

26,440

77
Account Title
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Land
Office Equipment
Accounts Payable
Unearned Rent
Cinta Cita, Capital
Cinta Cita, Drawing
Fees Earned
Wages Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
Insurance Expense
Rent Revenue
Wages Payable
Depreciation Expense
Accum. Depreciation
Net income

Adjusted
Trial Balance
Debit

2,065
2,720
760
2,200
20,000
1,800

4,000
4,525
1,600
985
2,040
455
200
50
43,400

Income Statement

Credit

Debit

Credit

120
250
50
43,400

Debit

2,065
2,720
760
2,200
20,000
1,800

900
240
25,000
16,840

Balance Sheet

4,525
1,600
985
2,040
455
200

16,840

4,000

900
240
25,000

(In Rp000)

120

250

50
9,855
7,105
16,960

Credit

16,960

33,545

16,960

33,545

77 50

26,440
7,105
33,545

(In Rp000)
Income Statement

Balance Sheet

9,855 16,960 33,545

7,105
16,960 16,960 33,545
Net Income

26,440
7,105
33,545

Net
Income

The difference between the Income Statement column

totals is the net income (or net loss) for the period.

78
78