Chapter 12 Work Sheet and Adjusting Entries Chapter 12 Performance Objectives: New Adjustments: Adjustment for Supplies Adjustment for merchandise inventory under the periodic inventory system Adjustment of unearned revenue Complete the work sheet with the new adjustments
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Work Sheet and Adjusting Entries
Kites & boomerangs
Hammers, lumber, etc.
Brings Inventory Balance to Counted Total!
Each month, we incur 1/12 of it as insurance expense!
This “updates our accounts” & makes our financial statements more accurate
When the insurance company receives our check, they record: “unearned insurance revenue”
Each month, they earn 1/12 of it as insurance revenue
This “updates their accounts” & makes their financial statements more accurateNew Adjustments: Unearned Revenue
“See both sides of the coin!”
One person’s expense is another person’s revenue!
Financial Statements, Closing Entries, And Reversing Entries
Multi-step income statementPrepare A Classified Income Statement For Merchandising Co.(“Multi-Step Income Statement”)
Provides better info.
for decision making!
Notice that posting of $2,000 wages expense results in an $800 balance.