ACCRUAL BASIS ACCOUNTING

revenues are recognized whenever they are performed or delivered regardless of ehn they are collecte
expenses are recognized whenever they are incurred and not when they are settled or paid

a unused office supplies 320

supplies expense 320

b. preapid insurance 1800

insurance expense 1800

c depreciation exp - office equipment 4500

accum depr. - office equipment 4500

d unearned rental income 4,000

rental income 4,000

e accrued income 3,000

service income 3,000

h accrued salaries 12,000

salaries expense 12,000
ardless of ehn they are collected
are settled or paid

depreciation = cost-salvage value/depreciable life

92,000-2000
90000/10
9000 x6/12 = 4500
july to dec
PHASES OF ACCOUNTING

RECORDING
CLASSIFYING
SUMMARIZING
INTERPRETING

NOTES PAYABLE
4000 4000
4900
4000 8900
4900

REY'S INTERNET CAFÉ

TRIAL BALANCE
DECEMBER 31, 200D
ACCOUNT TITLE DEBIT CREDIT
Cash 56,600
Accouts receivable 3,000
Notes receivable 1,650
Tools 1,000
Furniture and Fixture 4,000
Office Equipment 25,900
Communication Equipment 50,000
Notes Payable 4900
Loan Payable 25000
Accounts Payable 11,700
Rey's Capital 124,500
Rey's Drawing 7,000
Service Income 25,350
Rent Income 8,000
Taxes and Licenses Expense 3,000
Communication Expense 1,250
Miscellanous Expense 450
Rent Expense 12,000
Advertising Expense 3,600
Salaries Expense 30,000
TOTAL 199,450 199,450
 A=L+OE

ACCOUNTS REC. - ALLOW FOR IMPAIRMENT LOSS = NET REALIZABLE VALUE

PREPAID EXPENSES - EXPENSES THAT ARE PAID IN ADVANCE

UNEXPIRED EXPENSE
UNUSED SUPPLIES

FURNITURE AND EQUPMENT-ACCUM. DEPRECIATION = NET BOOK VALUE

ACCRUED EXPENSES ARE EXPENSES ALREADY INCURRED BUT NOT YET PAID

ACCRUED INCOME - INCOME ALREADY EAARNED BUT NOT YET COLLECTED

UNEARNED INCOME INCOME ALREADY COLLECTED BUT NOT YET PERFORMED

CALENDAR PERIOD - IT FOLLOWS THE CALENDAR, STARTS WITH JANUARY AND ENDS WITH Dec.
FISCAL PERIOD - IT CODMPLETES A 12 MONTH CYCLE, BUT NOT STARTING January

NELSON TRUCKING COMPANY

STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FISCAL YEAR ENDED JUNE 30, 200C

NELSON CAPITAL, JUNE 30, 200B 500000

ADD: ADDITIONAL INVESTMENT 20000
BALANCE 520000
ADD: NET INCOME (LESS Net loss) 98,100
BALANCE 421,900
LESS NELSON PERSONAL 25,000
NELSON CAPITAL JUNE 30, 200C 396,900

NELSON TRUCKING COMPANY

INCOME STATEMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 200C

TRUCKING SERVICE INCOME 267,000

RENTAL INCOME 12,000
TOTAL REVENUES 279,000
LESS: EXPENSES
RENT 48,000
REPAIR & MAINTENANCE 36,000
UTILITIES 12,450
GAS & OIL 76,000
INSURANCE TAXES & LICENSES 8,450
TOTAL EXPENSES 180,900
NET INCOME 98,100
ABLE VALUE

OT YET PAID

COLLECTED

T PERFORMED

AND ENDS WITH Dec.