LESSON 16-1

LESSON 16-1Recording Adjusting EntriesLESSON 16-15/4/15GREEN1ADJUSTING ENTRIES RECORDED FROM A WORK SHEETLESSON 16-123page 480

2145671.Heading2.Date3.Identify the first adjustment4.Account debited5.Debit6.Account credited7.Credit8.Continue down the Adjustments columnsLESSON 16-15/4/15GREEN2ADJUSTING ENTRY FOR ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTSLESSON 16-13

ADJUSTING ENTRY FOR MERCHANDISE INVENTORYLESSON 16-14

ADJUSTING ENTRY FOR SUPPLIESOFFICELESSON 16-15page 483

ADJUSTING ENTRY FOR SUPPLIESSTORELESSON 16-16page 483

ADJUSTING ENTRY FOR PREPAID INSURANCELESSON 16-17page 484

ADJUSTING ENTRY FOR DEPRECIATIONOFFICE EQUIPMENTLESSON 16-18

ADJUSTING ENTRY FOR DEPRECIATIONSTORE EQUIPMENTLESSON 16-19

ADJUSTING ENTRY FOR FEDERAL INCOME TAXESLESSON 16-110page 485

LESSON 16-2Recording Closing Entries for Income Statement AccountsLESSON 16-25/4/15GREEN11THE INCOME SUMMARY ACCOUNTLESSON 16-212page 487

CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCESLESSON 16-213

12page 4883.Debits to close41.Heading2.Date4.Credit to Income Summary33CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESLESSON 16-214

124page 4893.Credits to close1.Date2.Account debited4.Debit amount33SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCESLESSON 16-215page 490Bal.209,960.00Closing 209,960.00(New Bal. zero)PurchasesAdj. (mdse. inv.)15,840.00Closing (credit amounts)500,253.10Closing (debit accounts)404,099.15(New Bal.80,313.95)Income SummaryCLOSING ENTRY TO RECORD NET INCOMELESSON 16-216

page 4911233.Credit Retained Earnings1.Date2.Debit Income SummaryCLOSING ENTRY FOR DIVIDENDSLESSON 16-217

page 4913.Credit Dividends1.Date2.Debit Retained Earnings123COMPLETED CLOSING ENTRIES FOR A CORPORATION RECORDED IN A JOURNALLESSON 16-218page 492

LESSON 16-3Preparing a Post-Closing Trial BalanceLESSON 16-35/4/15GREEN19POST-CLOSING TRIAL BALANCELESSON 16-3203.Balances of asset accounts4.Balances contra asset, liability, and capital accounts

16page 4967.Double lines6.Totals5.Word Totals2.Accounts that have balances1.Heading23475LESSON 16-35/4/15GREEN20ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONLESSON 16-321

12345page 497(continued on next slide)1.Source documents are checked, and transactions are analyzed.2.Transactions are recorded in journals.3.Journal entries are posted to the accounts payable ledger, the accounts receivable ledger, and the general ledger.4.Schedules of accounts payable and account receivable are prepared from the subsidiary ledgers.5.A work sheet is prepared from the general ledger.ACCOUNTING CYCLE FOR A MERCHANDISING BUSINESS ORGANIZED AS A CORPORATIONLESSON 16-322Financial statements are prepared.

page 497(continued from previous slide)67899.A post-closing trial balance of the general ledger is prepared.8.Adjusting and closing entries are posted to the general ledger.Adjusting and closing entries are journalized from the work sheet.