Adjusted Trial Balance
Closing The Books
Where do we get the information needed to prepare our Adjusted Trial Balance ? Our Trial Balance Worksheet. Need Proof ?
We start with the information from our Trial Balance and then enter our adjusting entries (debits and credits) and add or subtract the amounts to arrive at our Adjusted Trial Balance amounts.
Assumptions and other events to use in adjusting our books are as follows:
1. Office Supplies Inventory had a beginning of the year balance of $500. Purchases of an additional $1000 were made during the year and charged directly to the Office Supplies Inventory Account which resulted in the ending balance of $1500 in the Trial Balance. We counted and valued the actual office supplies we had on hand at year end. The ending value of the actual count was $300.
2. We totalled our Accounts Receivable Subsidiary Ledger and the balance agreed with our Accounts Receivable Control Account. They both totalled $25800. We also reviewed all of our customers and found that one of our customer accounts Joe The Dead Beat who owed us $1000 was very past due and had bankrupted.
3, We reviewed our insurance coverage and found that our premium for coverage for our entire year was $6000. The policy runs from January-December and we paid the full amount for the coverage in January.
4. Our Inventory for Resale is made up of all our computers, monitors, and printers. The balance in the Trial Balance is the balance as of the beginning of our year and was based on our prior year's count. We received our current year's count from our warehouse and arrived at a value (cost) of $8000 as of December 31, xxxx. Our purchases account in our trial balance shows that we purchased $70,000 worth of computer equipment during the year.
5. We reviewed our bank statements for the year and found that we had failed to record our monthly bank charges. The total of the charges for the year was $240.
6. The only property or equipment we have is a brand new delivery truck. The cost of the truck was $15,500 and is the amount shown in the Trial Balance Column. The truck was purchased at the beginning of January and we feel that we'll get 5 years of use from this vehicle.
7. We reviewed our receiving reports and found that we had incurred a maintenance expense in December for $500 that had not yet been billed by WeFixIt Company.
8. During a review of our supplier's invoices, we found an invoice for $250 that was charged to Advertising Expense that should have been charged to Professional Fees.
9. On December 31, xxxx Smart Computerguy decided that he needed some additional help and hired two employees to begin working the following year.
Our Adjusted Trial Balance
Shabby Computer Systems Adjusted Trial Balance Worksheet December 31, xxxx | ||||||||
| Account Name / Description | Trial Balance | Adjusting Entries | Adjusted Trial Balance | |||||
| Debit | Credit | Debit | Ref | Credit | Ref | Debit | Credit | |
Balance Sheet Accounts | ||||||||
Cash | 5500 | 240 | 5 | 5260 | ||||
Accounts Receivable | 25800 | 1000 | 2 | 24800 | ||||
Office Supplies Inventory | 1500 | 1200 | 1 | 300 | ||||
Prepaid Insurance | 6000 | 6000 | 3 | |||||
Inventory for Resale | 10500 | 70000 | 4 | 72500 | 4 | 8000 | ||
Truck | 15500 | 3100 | 6 | 12400 | ||||
Accounts Payable | 1000 | 1000 | ||||||
Other Accruals | 500 | 7 | 500 | |||||
Shabby Computer Systems, Capital | 22100 | 22100 | ||||||
Shabby Computer Systems, Drawings | 24000 | 24000 | ||||||
Total Balance Sheet Accounts | 88800 | 32100 | 74760 | 32600 | ||||
Revenue & Expense Accounts | ||||||||
Consulting Services | 50000 | 50000 | ||||||
Computer Sales | 100000 | 100000 | ||||||
Cost of Goods Sold-Computers | 72500 | 4 | 72500 | |||||
Purchases | 70000 | 70000 | 4 | |||||
Rent Expense | 6000 | 6000 | ||||||
Utilities Expense | 4800 | 4800 | ||||||
Office Supplies | 1200 | 1 | 1200 | |||||
Insurance Expense | 6000 | 3 | 6000 | |||||
Vehicle Operation Expense | 3600 | 3600 | ||||||
Maintenance & Repairs | 2400 | 500 | 7 | 2900 | ||||
Depreciation Expense | 3100 | 6 | 3100 | |||||
Bad Debt Expense | 1000 | 2 | 1000 | |||||
Bank Charges | 240 | 5 | 240 | |||||
Advertising Expense | 4500 | 250 | 8 | 4250 | ||||
Professional Fees Expense | 2000 | 250 | 8 | 2250 | ||||
Total Revenue/Expense Accounts | 93300 | 150000 | 107840 | 150000 | ||||
| Total All Accounts | 182100 | 182100 | 182600 | 182600 | ||||
Click on the Reference Number (Ref) in the Adjusted Trial Balance Worksheet for an explanation of the adjusting entry.
What's Next ?
After Closing Trial Balance Worksheet