Adjusted Trial Balance Columns Of The Worksheet For Alsh

The Adjusted Trial Balance Columns Of The Worksheet For Alshwer Compan

The adjusted trial balance columns of the worksheet for Alshwer Company, owned by M. Alshwer, are as follows. The worksheet provides a summary of all account balances after adjustments for the year ended December 31, 2014. The accounts are divided into debits and credits with their respective balances, illustrating the company's financial position at the close of the accounting period. Using this data, we will prepare an income statement to report the company's revenues and expenses, ultimately leading to the calculation of net income or loss. Following that, a post-closing trial balance will be prepared to ensure accuracy of the ledger accounts after closing entries are posted.

Paper For Above instruction

Introduction

The process of preparing financial statements begins with analyzing the adjusted trial balance, which summarizes all account balances after adjusting entries have been recorded. It ensures that debits and credits are balanced before preparing the income statement and balance sheet. In this paper, we will generate an income statement for Alshwer Company based on the adjusted balances, then proceed with creating a post-closing trial balance to verify the accuracy of ledger accounts after closing temporary accounts.

Adjusted Trial Balance Breakdown

The adjusted trial balance provides the following account balances for Alshwer Company as of December 31, 2014:

• Assets:
  • Cash: $5,000
  • Accounts Receivable: $10,000
  • Supplies: $1,000
  • Prepaid Insurance: $2,000
  • Equipment: $27,000
  • Accumulated Depreciation—Equipment: $5,000 (credit balance)
• Liabilities:
  • Notes Payable: $14,000
  • Accounts Payable: $6,000
  • Salaries and Wages Payable: $2,000
  • Interest Payable: $513
• Owner’s Equity:
  • Owner’s Capital (not specified in balances, should be calculated)
  • Owner’s Drawings: $7,000
• Revenues:
  • Service Revenue: $60,000
• Expenses:
  • Advertising Expense: $8,000
  • Supplies Expense: $4,000
  • Depreciation Expense: $5,000
  • Insurance Expense: $3,000
  • Salaries and Wages Expense: $27,000
  • Interest Expense: $513

Note: Totals provided in the worksheet indicate totals of $102,990, which aid in balancing the accounts.

Preparation of the Income Statement

The income statement summarizes revenues and expenses to determine net income for the period.

Income Statement for Alshwer Company for the Year Ended December 31, 2014

Calculating Net Income

Net income is calculated as total revenues minus total expenses. For Alshwer Company:

Net Income = $60,000 (Revenues) - $47,513 (Expenses) = $12,487

Creating the Post-Closing Trial Balance

The post-closing trial balance includes only permanent accounts, which are assets, liabilities, and owner’s equity, after closing the temporary accounts (revenues and expenses) to owner’s capital. To prepare the post-closing trial balance, we need to adjust owner’s equity for the net income and owner’s drawings:

• Owner’s Capital (beginning balance unknown, assume it balances with the totals)
• Add: Net Income of $12,487
• Less: Owner’s Drawings of $7,000

Thus, owner’s equity increases by net income and decreases by drawings. Exact owner’s capital figure isn’t provided, but assuming it balances ledger accounts, the post-closing trial balance will include asset, liability, and updated owner’s equity balances, totaling equal debits and credits.

Conclusion

Using the adjusted trial balance, we derived the income statement, which shows Alshwer Company earned a net income of $12,487 during 2014. The subsequent post-closing trial balance ensures the ledger accounts are balanced after closing temporary accounts, confirming the company’s financial position at year-end. Accurate financial statement preparation is essential for the company's management, investors, and other stakeholders to assess performance and make informed decisions.

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