Preparing A Worksheet For The Unadjusted Trial Balance

Exercise 1preparing A Worksheetthe Unadjusted Trial Balance Of Voice L

Exercise 1 Preparing a Worksheet The unadjusted trial balance of Voice Link at November 30, 2016, follows: Additional information at November 30, 2016: Accrued service revenue, $600. Depreciation, $300. Accrued salaries expense, $600. Prepaid rent expired, $900. Office Supplies used, $500. Instructions Complete Voice Link’s worksheet for the month ended November 30, 2016. How much was net income for November?

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The task involves preparing a worksheet for Voice Link based on the unadjusted trial balance as of November 30, 2016, incorporating additional adjusting entries, and calculating the net income for the month. A worksheet in accounting provides a comprehensive way to organize necessary adjustments and prepare adjusted financial statements, specifically the income statement and balance sheet. It begins with the unadjusted trial balance, adds adjustments, computes the adjusted trial balance, and ultimately determines net income or loss.

To execute this task, first, review the unadjusted trial balance to capture the initial balances of all accounts. Next, apply the additional information provided to adjust the accounts. Adjustments include recognizing accrued revenues, depreciation, accrued expenses, prepaid expenses, and used supplies. Each adjustment involves identifying which accounts are affected—whether debited or credited—and updating their balances accordingly.

The detailed steps for completing this worksheet are as follows:

1. Record the unadjusted trial balance, listing account titles and balances in debit or credit columns.

2. Enter the adjustments derived from the additional information:

- Accrued Service Revenue: Increase revenue (credit) by $600; increase receivable (debit).

- Depreciation: Record depreciation expense (debit of $300); increase accumulated depreciation (credit).

- Accrued Salaries Expense: Increase salaries expense (debit) by $600; increase liabilities (credit).

- Prepaid Rent Expired: Recognize rent expense (debit of $900); decrease prepaid rent asset (credit).

- Office Supplies Used: Record supplies expense (debit of $500); decrease supplies asset (credit).

3. Summarize the adjusted entries to determine the adjusted trial balance.

4. Calculate total debits and credits after adjustments to ensure they are balanced.

5. Prepare an income statement portion by subtracting total expenses from total revenues to find net income.

6. Determine net income, which in this scenario involves summing all revenues (including accrued service revenue) and subtracting all expenses (depreciation, salaries, rent, supplies).

Based on the adjustments:

- Revenue adjustments: Service revenue increased by $600.

- Expenses adjustments: Depreciation $300, salaries $600, rent $900, supplies $500.

Assuming initial balances in revenue and expense accounts are zero or as given, the calculation proceeds accordingly.

Calculating total revenues:

- Unadjusted revenue: assumed zero or as given in the trial balance

- Adjusted revenue: $600 (accrued service revenue)

Calculating total expenses:

- Depreciation: $300

- Salaries expense: $600

- Rent expense: $900

- Supplies expense: $500

Total expenses = 300 + 600 + 900 + 500 = $2,300

Now, suppose the initial unadjusted trial balance reflects other revenues and expenses, but as these are not specified, the relevant adjusted revenue and expenses are as above. The net income for November is:

Net Income = Total Revenues - Total Expenses = $600 - $2,300 = -$1,700

This indicates a net loss of $1,700 for November.

In conclusion, preparing the worksheet involves updating the trial balance with the adjustments provided, then summing revenues and expenses to determine the net income. The approximate net loss for November 2016 in this scenario is $1,700, reflecting the impact of the expenses exceeding the revenues accrued during the period.

References

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