Please Help. I can't get the balance sheet to balance out at at. I am frustrated!
Prepare a Trial Balance, an Income Statement and a Balance Sheet.
Doris' Custom Designs
Jan. 1 Doris deposits $10,000 in the bank to start her business.
(Hint: use "misc. credit" column.)
Jan. 2 Doris pays $800 for rent for January. (Cheque #100)
Jan. 6 Doris pays $1,200 to a local newspaper for an "advertorial". (Cheque #101)
Jan. 6 Doris receives $2,200 cash for her first design consultation.
Jan. 10 Doris pays $600 to a part-time secretary. (Cheque #102)
Jan. 11 Doris purchases office supplies for $160. (Cheque #103)
Jan. 15 Doris receives $1,200 cash for another design consulting job.
Jan. 20 Doris purchases new computer equipment for $3,600. (Cheque #104)
Jan. 24 Doris pays $400 to produce flyers promoting her business. She uses cheque #105.
Jan. 30 Doris receives her telephone bill for January for $180. She pays it with cheque #106.
Jan. 30 Doris pays $160 to the hydro company for her office, using cheque #107.
Jan. 31 Doris receives $3,800 for a large consulting job that she has just completed.
I get Debits of 7,100.
Credits of 17,200 (including misc. credit of 10,000)
Net Income of 100, if you ignore the 10,000.
Sra
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hamzanajam @ h o t m a i l . c o m
To balance the balance sheet and prepare the trial balance, income statement, and balance sheet, follow these steps:
1. Start by creating a trial balance:
- List all the accounts (assets, liabilities, and equity) in a table with two columns: debit and credit.
- Enter the account balances for each transaction in the appropriate debit or credit column.
2. Calculate the total debits and credits:
- Add up the debit column and the credit column separately.
- Ensure that the total debits equal the total credits. If they don't, there may be errors in the transactions or account balances.
3. Prepare the income statement:
- Identify the revenue and expense accounts from the trial balance.
- Calculate the total revenue by adding up all revenue account balances.
- Calculate the total expenses by adding up all expense account balances.
- Subtract the total expenses from the total revenue to get the net income (or loss).
4. Prepare the balance sheet:
- List all the asset, liability, and equity accounts.
- Calculate the total assets by adding up all asset account balances.
- Calculate the total liabilities by adding up all liability account balances.
- Calculate the owner's equity by subtracting total liabilities from total assets.
- Verify that the total assets equal the sum of total liabilities and owner's equity.
If you are struggling to balance the balance sheet, carefully review each transaction and make sure that you have correctly entered the amounts in the proper debit or credit columns. Additionally, check if you have missed any transactions or if there are any errors in your calculations.