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The WORKSHEET THEORY EXERCISE Write T if the statement is true and F if the statement is false ______ 1

Accounting

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The WORKSHEET

THEORY EXERCISE

Write T if the statement is true and F if the statement is false

______ 1. The worksheet is a summary device used by accountants to assemble on a sheet of paper the information necessary to prepare the financial statements.

_______2. Operations result in a net loss if the credit total in the income statement exceeds the debit total.

_______3. The difference between the income statement totals and the balance sheet totals are not. Always the same.

_______4. A net loss is written in the credit column of the income statement and the debit column of the balance sheet.

_______5. In the worksheet, the balance of the asset, liability, and capital accounts are extended to the ‘income statement section.

EXERCISE I Presented is the year –end unadjusted trial balance of the services.

Star Services

Trial Balance

December 31, 20xx

 

Debit Credit

Cash P150,000

Accounts Receivable 120,000

Supplies 7,000

Prepaid Insurance 15,000

Office Equipment 125,000

Accumulated Depreciation-Office Equip. P5,000

Accounts Payable 55,000

Mol, Capital 273,000

Mol, Drawing 50,000

Service Income 198,000

Rent Expense 30,000

Salaries Expense 25,000

Utilities Expense 9,000

Total P531,000 P531,000

 

Year-end adjustments:

1) Insurance Expense for the year is P8,000

2) Depreciation Expense for office equipment is P10,000

3) Allowance for Bad Debts is P6,000.

REQUIRED:

1) Prepare the adjusting entries

2) Prepare Worksheet with the headings on a 10 column worksheet (Trial Balance Dr. Cr; Adjustments Dr, Cr; Adjusted Trial Balance Dr, Cr; Income Statement Dr., Cr.,; & Balance Sheet Dr., Cr, )