LESSON 6-1
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Chapter 6 Work Sheet for a Service Business
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Objectives 1. Define accounting terms related to a a work sheet for a service business organized as a proprietorship. 2. Identify accounting concepts and practices related to a work sheet for a service business organized as a proprietorship. 3. Prepare a heading and a trial balance on a work sheet. CENTURY 21 ACCOUNTING © Thomson/South-Western
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Objectives: 4. Plan adjustments for supplies and prepaid insurance. 5. Complete a work sheet for a service business organized as a proprietorship. 6. Identify selected procedures for finding and correcting errors in accounting records.
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LESSON 6-1
LESSON 6-1 Creating a Worksheet
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PREPARING THE HEADING OF A WORK SHEET
page 153
1 Name of Company 2 Name of Report 3 Date of Report
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PREPARING A TRIAL BALANCE ON A WORK SHEET 2
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1. Write the general ledger account titles. 2. Write the general ledger debit account balances. Write the general ledger credit account balances. 3. Rule a single line across the two Trial Balance columns. 4. Add both the Trial Balance Debit and Credit columns. 5. Write each column’s total below the single line. 6. Rule double lines across both Trial Balance columns. LESSON 6-1
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Application
Application Problem 6-1 (pg. 172) http://www.accountingxtra.swlearning.com/fundamentals/default.html
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LESSON 6-1
LESSON 6-2 Planning Adjusting Entries on a Work Sheet
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SUPPLIES ADJUSTMENT ON A WORK SHEET
page 158
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1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. CENTURY 21 ACCOUNTING © Thomson/South-Western
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PREPAID INSURANCE ADJUSTMENT ON A WORK SHEET
page 159
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1. Write the debit amount. 2. Write the credit amount. 3. Label the two parts of this adjustment. CENTURY 21 ACCOUNTING © Thomson/South-Western
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PROVING THE ADJUSTMENTS COLUMNS page 160 OF A WORK SHEET
1 2 1. Rule a single line. 2. Add both the Adjustments Debit and Credit columns. Write each column’s total. 3. Rule double lines. CENTURY 21 ACCOUNTING © Thomson/South-Western
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PREPARING A WORK SHEET
page 160 C
1. Write the heading. 2. Record the trial balance. 3. Record the supplies adjustment. 4. Record the prepaid insurance adjustment. 5. Prove the Adjustments columns. 6. Extend all balance sheet account balances. 7. Extend all income statement account balances. 8. Calculate and record the net income (or net loss). 9. Total and rule the Income Statement and Balance Sheet columns. CENTURY 21 ACCOUNTING © Thomson/South-Western
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1 2 496400 10000 15000 10000 102500 120000
6 (a)
71500 (b) 10000 20000 5000 500000 356500
21300 (b)
10000
(a)
71500
2800 30000 11000 881500 881500 Net Income
81500
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20000 5000 500000
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62500
496400 10000 15000 10000 31000 110000
62500 356500 21300 10000 2800 7 30000 71500 5 11000 81500 146600 356500 734900 525000 209900 209900 356500 356500 734900 734900
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Application
Application Problem 6-2 (pg. 172) http://www.accountingxtra.swlearning.com/fundamentals/default.html
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LESSON 6-3 Extending Financial Statement Information on a Work Sheet
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EXTENDING BALANCE SHEET ACCOUNT page 162 BALANCES ON A WORK SHEET 2
1. Debit balances without adjustments 2. Debit balances with adjustments 3. Credit balances without adjustments CENTURY 21 ACCOUNTING © Thomson/South-Western
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EXTENDING INCOME STATEMENT ACCOUNT BALANCES ON A WORK SHEET
page 163
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3 1. Sales balance 2. Expense balances without adjustments 3. Expense balances with adjustments CENTURY 21 ACCOUNTING © Thomson/South-Western
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RECORDING NET INCOME, AND TOTALING AND RULING A WORK SHEET
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1. Single rule 2. Totals 3. Net income
3 4. Extend net income 5. Single rule
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6. Totals 7. Double rule LESSON 6-1
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CALCULATING AND RECORDING A NET LOSS ON A WORK SHEET
page 165
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1. 2. 3. 4.
Single rule Totals Net loss Extend net loss
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Application
Application Problem 6-3 (pg. 172) http://www.accountingxtra.swlearning.com/fundamentals/default.html
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LESSON 6-4 Finding and Correcting Errors on the Work Sheet
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CORRECTING AN ERROR IN POSTING TO page 168 THE WRONG ACCOUNT
2 Correct entry
1 Incorrect entry 1. Draw a line through the entire incorrect entry. Recalculate the account balance and correct the work sheet. 2. Record the posting in the correct account. Recalculate the account balance, and correct the work sheet. CENTURY 21 ACCOUNTING © Thomson/South-Western
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CORRECTING AN INCORRECT AMOUNT
page 169
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1. Draw a line through the incorrect amount. 2. Write the correct amount just above the correction in the same space. 3. Recalculate the account balance, and correct the account balance on the work sheet.
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CORRECTING AN AMOUNT POSTED TO THE WRONG COLUMN
page 169
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4. Draw a line through the incorrect item in the account. 5. Record the posting in the correct amount column. 6. Recalculate the account balance, and correct the work sheet.
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TERMS REVIEW
Pages 155, 161, 166
fiscal period work sheet trial balance adjustments balance sheet income statement net income net loss
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Homework 1.1 Application Problems
a. Review problems completed in class. b. Use available interactive e-workpapers to complete application problems not worked in class. c. No Chapter 6 application problems are due this week. 1.2 Mastery Problem 6-5 (p.173) Sect. 3A – Due 07/03/07 Sect. 5B – Due 07/02/07 1.3 Quiz – Chapter 6 a. Sect. 3A – Due 07/03/07 Sect. 5B – Due 07/02/07 b. Email quiz results to Instructor (
[email protected]) and to yourself. 1.4 Exam 2 (Chapters 6 – 8), 100 points, 75 minutes Sect. 3A -- Sat, 07/07/07 Sect. 5B – Sat, 07/05/07 Congratulations ! You have made it through Chapter 6.
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