Adjusted Trial Balance PDF

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Adjusted Trial Balance...

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Adjusted Trial Balance An adjusted trial balance is prepared after adjusting entries are made and posted to the ledger. This is the second trial balance prepared in the accounting cycle. Its purpose is to test the equality between debits and credits after adjusting entries are entered into the books of the company. To illustrate how it works, here is a sample unadjusted trial balance: Gray Electronic Repair Services Unadjusted Trial Balance December 31, 2016 ACCOUNT TITLE DEBIT CREDIT Cash $7,480.00 Account Receivable 3,400.00 Service Supplies 1,500.00 Furniture and Fixtures 3,000.00 Service Equipment 16,000.00 Accounts Payable $9,000.00 Loans Payable 12,00.00 Mr. Gray, Capital 13,200.00 Mr. Gray, Drawing 7,000.00 Service Revenue 9,550.00 Rent Expense 1,500.00 Salaries Expense 3,500.00 Taxes and Licenses 370.00 Totals $43,750.00 $43,750.00

At the end of the period, the following adjusting entries were made: Dec 31 Account Receivable 300.00 Service Revenue 300.00 31

Utilities Expense Utilities Payable

31

Service Supplies Expense Service Supplies

31

Depreciation Expenses Accumulated Depreciation

1,800.00 1,800.00 900.00

720.00 720.00

After posting the above entries, the values of some of the items in the unadjusted trial balance will change. Take the first adjusting entry. Accounts Receivable is debited hence is increased by $300. Service Revenue is credited for $300. The balance of Accounts Receivable is increased to $3,700, i.e. $3,400 unadjusted balance plus $300 adjustment. Service Revenue will now be $9,850 from the unadjusted balance of $9,550. Next entry. Utilities Expense and Utilities Payable did not have any balance in the unadjusted trial balance. After posting the above entries, they will now appear in the adjusted trial balance. Third. Service Supplies Expense is debited for $900. Service Supplies is credited for $900. The Service Supplies account

had a debit balance of $1,500. After incorporating the $900 credit adjustment, the balance will now be $600 (debit). And fourth. There were no Depreciation Expense and Accumulated Depreciation in the unadjusted trial balance. Because of the adjusting entry, they will now have a balance of $720 in the adjusted trial balance. Adjusted Trial Balance Example After incorporating the adjustments above, the adjusted trial balance would look like this. Just like in the unadjusted trial balance, total debits and total credits should be equal. Gray Electronic Repair Services Adjusted Trail Balance December 31, 2018 Account Title Debit Credit Cash $7,480.00 Account Receivable 3,700.00 Service Supplies 600.00 Furniture and Fixture 3,000.00 Service Equipment 16,000.00 Accumulated $720.00 Depreciation Accounts Payable 9,000.00 Utilities Payable 1,800.00 Loans Payable 12,000.00 Mr. Gray, Capital 13,200.00 Mr. Gray Drawings 7,000.00 Service Revenue 9,850.00 Rent Expense 1,500.00 Salaries Expense 3,00.00 Taxes and Licenses 370.00 Utilities Expense 1,800.00 Service Supplies 900.00 Expense

Depreciation Expense 720.00 Totals $46,570.00

$46,570.00...