PREPARATION OF 10-COLUMN WORKSHEET (OPTIONAL)

The preparation of the worksheet is an optional step in the accounting process. A worksheet is a
columnar device which helps in the preparation of the financial statements because it summarizes all the
information needed in the financial statements. With the help of a worksheet, financial statements are
done easier and faster. So why is the worksheet composed of 10 columns? It is because the worksheet is
divided into 5 functions which are:
• Unadjusted Trial balance
• Adjustments
• Adjusted trial balance
• Income statement
• Balance sheet
Each function is composed of a pair of debit and credit columns that’s why it is a 10-column worksheet. In
the preparation of a worksheet it is very important to take note the heading which is consist of the name
of the company, title (worksheet) and the period covered. Shown below is how a worksheet is prepared.

Illustrative Example:
On December 31, 2019, LAV Company decided to use a worksheet to facilitate the preparation of the
financial statements. Presented below is the worksheet prepared by the accounting assistant of LAV
Company.

Other information: 12/31/2019

Supplies Expense 2,500
• As of December 31,2019, supplies on hand amounted to P 5,000. Supplies 2,500
Salaries Expense 15,000
• Salaries of P 15,000 at December 31,2019 is not yet accrued. Salaries payable 15,000
Accounts receivable 10,000
• On December 31,2019, P 10,000 worth of professional services are rendered on account.
Professional fees income 10,000

• As of December 31,2019, balance of unearned professional income not yet rendered is P 2,000.
Unearned professional income 3,000
• The company estimates 90% of the accounts receivable is collectible. Professional fees income
Bad debts expense 2,500
• Annual depreciation for the building is P 50,000. Allowance for bad debts 2,500

Depreciation expense- building 50,000

Allowance for bad debts Accumulated depreciation- building 50,000

1,500

Bad debts expense for December 2019 2,500

12/31/2019
4,000

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 LAV Company
Worksheet
For the month
year ended December 31,2019

Accoun Accounts Unadjusted Adjustments Adjusted Trial Income Balance Sheet

t No. Trial balance (b) balance Statement (e)
(a) (c ) (d)
Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr
101 Cash 100,00 100,00 100,00
0 0 0
102 Accounts 30,000 10,00 40,000 40,000
Receivable
0
103 Allowance 1,500 2,500 4,000 4,000
for bad
debts
104 Supplies 7,500 2,500 5,000 5,000
105 Building 500,00 500,00 500,00
0 0 0
106 Accumulate 50,000 50,00 100,00 100,00
d
0 0 0
Depreciatio
n- Building
201 Accounts 131,00 131,00 131,00
Payable
0 0 0
202 Salaries 10,000 15,00 25,000 25,000
payable
0
203 Unearned 5,000 3,000 2,000 2,000
professional
income
301 LAV, Capital 400,00 400,00 400,00
0 0 0
302 LAV, 5,000 5,000 5,000
Drawing
401 Professional 45,000 13,00 58,000 58,00
Fees income
0 0
501 Salaries 15,00 15,000 15,00
Expense
0 0
502 Supplies 2,500 2,500 2,500
expense
503 Depreciatio 50,00 50,000 50,00
n expense
0 0
504 Bad debt 2,500 2,500 2,500
expense

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 TOTALS 642,50 642,50 83,00 83,00 720,00 720,00 70,00 58,00 650,00 662,00
0 0 0 0 0 0 0 0 0 0
Net 12,00 12,000
profit/loss
0

a.) In the first function which is the Unadjusted Trial Balance, it shows the balances before
adjustments. This are the balances gathered from the prepared trial balance in Step 3 in the
accounting cycle. The equality of the total debits and credits shall also be maintained which can be
seen in the worksheet in the row of totals.

b.) in the Adjustments column, adjusting entries are plotted which is based on review of accounts and
additional information.

c.) In the adjusted trial balance column, each account is computed to get the adjusted balance and
the amount is extended to this column. Using cross footing:

• if an account has a normal debit balance and its adjustment is also in the debit side, the balance of
the account in the unadjusted trial balance will be added to the adjustment and the sum will be
extended to the debit column of the adjusted trial balance.
• if an account has a normal debit balance and its adjustment is in the credit side or vice versa, the
balance of the account in the adjustment will be deducted to the unadjusted trial balance and the
difference will be extended to the normal balance of the account in the adjusted trial balance.
d.) In the Income statement section of the worksheet, all the nominal accounts (income and expense)
are extended, then the total debits and credits of the income statement section are totaled. To
determine the profit or loss for the period, the total debits and credits are netted. If the total credits
column is greater than the total debits, there will be profit and if total debits is greater than total
credits it will result to a loss. In order to maintain the equality of debits and credits in the income
statement column, the profit for the period is placed in the debit side while if it is a loss, the amount
is placed in the credit side.
e.) In the Balance sheet section of the worksheet, all the real accounts (assets, liabilities and equity)
are extended, then the total debits and credits of the income statement section are totaled. If a
profit resulted for the period, profit is extended in the credit column in the balance sheet section

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 while if it resulted to a loss, it is extended in the debit column. With this it also maintains the
equality of the total debits and credits under the balance sheet section of the worksheet.

A worksheet is not a requirement in the steps in the accounting process, but it is used as a basis in the
journalizing the adjusting entries and preparation of the financial statements.

Exercise XVIII: Presented below is the unadjusted trial balance of Helper Company for the year ended December
31,2019:

Helper Company
Unadjusted Trial Balance
As of December 31,2019

Debit Credit
Cash on hand and in banks P 189,000
Accounts receivable 967,500
Office supplies on hand 94,500
Rent paid in advance 540,000
Furnitures and fixtures 3,262,500
Accumulated depreciation P 652,500
Accounts payable 427,500
Note payable 1,350,000
Aurora, Capital 2,842,500
Aurora, Personal 1,800,00
Service fee income 7,699,500
Salaries and wages 5,656,500
Heat,light and power 157,500
Taxes and licenses 139,500
Telephone expenses 165,000
TOTAL P 12,972,000 P 12,972,000

Additional information:
- Office supplies on hand at December 31,2019 amounted to P 42,500.
- On October 30,2019, Helper paid Lessor Company P 540,000 for six months’ worth of rent on the office
building, commencing on November 1,2019.
- Depreciation expense for the furniture is 10% per annum.
- As of December 31,2019, the following expenses were still unrecorded and unpaid:
a.) Salaries of employees for the second half of December, P 157,500.
b.) Telephone expenses for the month of December, P 15,000.
c.) Heat, light and power expenses for the second half of December, P 28,000.
d.) Interest on notes payable is 24%. The P 1,350,000 note was issued to the Bank of the Philippine
Archipelago on November 1,2019 and will be due in 12 months.
REQUIRED:
A. Using Microsoft excel,prepare a 10-column worksheet and the adjusting journal entries.

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