WORKSHEET

and FINANCIAL
STATEMENTS
 WORKSHEET
Definition (Step 5)
 Simplifies the adjusting and closing process and can
also reveal errors
 Multi-column document provides an efficient way
to summarize the data for financial statements
 A summary device used by the accountant for his
convenience
 WORKSHEET
Steps in the Preparation
 Step 1
• Enter the account balances of the unadjusted trial balance
columns and total the amounts (Column 1 & 2).
 Step 2
• Enter adjusting entries in the adjustment columns and total
the amounts (Column 3 & 4).
 Step 3
• Compute each account’s adjusted balance by combining the
unadjusted trial balance and the adjustment figures.
Enter the amounts in the adjusted trial balance columns
(Column 5 & 6).
 WORKSHEET
Steps in the Preparation
 Step 4
• Extend the asset, liability and owner’s equity amounts from
the adjusted trial balance columns to the balance sheet
columns (Column 9 & 10). Extend the income and expense
amounts to the income statement columns (Column 7 & 8).
Total the columns.
 Step 5
• Compute profit or loss as the difference between total
revenues and total expenses in the income statement.
Enter profit or loss as a balancing amount in the income
statement and in the balance sheet, and compute the final
column totals.
 FINANCIAL STATEMENTS

Definition (Step 6)
 The means by which the information
accumulated and processed in financial
accounting is periodically communicated to
the users.
 An entity shall present with equal
prominence all of the financial
statements in a complete set of financial
statements
 FINANCIAL STATEMENTS

Complete set
1. A statement of financial position as at the end of the
period
2. A statement of comprehensive income for the period
3. A statement of changes in equity for the period
4. A statement of cash flows for the period
5. Notes, comprising a summary of significant
accounting policies and other explanatory
information
 FINANCIAL STATEMENTS

Lifelong Weddings
Income Statement
For the month ended April 30, 2018

Revenues
Consulting Revenues 210,000
Referral Revenues 5,000 215,000
Expenses
Salaries Expense 16,000
Supplies Expense 30,000
Rent Expense 7,500
Insurance Expense 350
Utilities Expense 4,500
Depreciation Expense - Service Vehicle 1,200
Depreciation Expense - Office Equipment 750
Interest Expense 500 60,800
Profit 154,200
 FINANCIAL STATEMENTS

Lifelong Weddings
Statement of Changes In Equity
For the month ended April 30, 2018

Rivera, Capital, April 1 250,000

Add Additional investments -
Profit 154,200 154,200
Total 404,200
Less Withdrawals 20,000
Rivera, Capital, April 30 384,200
 Lifelong Weddings
Balance Sheet
April 30, 2018

ASSETS
Current Assets
Cash 280,000
Accounts Receivable 30,000
Supplies 20,000
Prepaid Rent 82,500
Prepaid Insurance 5,650
Total Current Assets 418,150
Noncurrent Assets
Property and Equipment (Net)
Service Vehicle 95,000
Less Accumulated depreciation 1,200 93,800
Office Equipment 60,000
Less Accumulated depreciation 750 59,250
Total Noncurrent Assets 153,050
Total Assets 571,200

LIABILITIES
Current Liabilities
Notes Payable 100,000
Accounts Payable 70,000
Utilities Payable 1,500
Interest Payable 500
Unearned Referral Revenues 15,000
Total Current Liabilities 187,000

OWNER'S EQUITY
Rivera, Capital 384,200
Total Liabilities and Owner's Equity 571,200
 STATEMENT OF COMPREHENSIVE INCOME

Definition (Step 6)
 The means by which the information
accumulated and processed in financial
accounting is periodically communicated to
the users.
 An entity shall present with equal
prominence all of the financial
statements in a complete set of financial
statements