MODULE 8
ADJUSTING JOURNAL ENTRIES,
12-COLUMN WORKSHEET
I. INTRODUCTION
A. OVERVIEW
This module contains the adjusting entries and preparation of a worksheet. Please go
back to Module 5 and review adjusting journal entries. In this module additional learning
of adjustment based on sales is given. Worksheet is also taken up, but this time it is a
12- column worksheet.
B. LEARNING OUTCOMES
At the end of the lesson, you should be able to:
1. Recall adjusting entries
2. Apply adjusting entries to a merchandising concern
3. Recall the preparation of a worksheet
4. Prepare a 12-column worksheet
C. REQUIREMENTS
After reading and studying the lessons, please answer the
questions/exercises at the end of the lesson.
D.PRE-ASSESSMENT
Problem-solving/Exercises
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CONTENTS
E.LESSON
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D. WORKSHEET
A worksheet is prepared to facilitate the preparation of adjusting entries, financial statements,
and closing entries. It is prepared before the construction of financial statements and before the
adjusting entries are entered in the journal and posted.
The following steps are taken in preparing a worksheet:
1. Write the heading of the worksheet at the top of the paper with the following information:
Name of the Business
Worksheet
For the period _________,200A 2.
Provide the following columns in the worksheet:
3. Copy the trial balance on the first two money columns
4. Enter the adjusting entries in the adjustment columns. Before each corresponding debit
and credit amounts, write in parenthesis the same index number or letter. Those
accounts which are not found in the trial balance should be written below the pre
adjusted trial balance
5. Compute the total in the adjustment columns
6. The adjusted trial balance column is the total of the pre-adjusted trial balance and
adjustment columns. Add the amounts if they are both debit. Then extend the amount to
the debit column. The same procedure will be followed if the amounts are both credits
and extend to the credit column. If the amount is one debit and one credit, subtract the
smaller amount from the bigger amount, and extend to the column of the bigger amount.
7. Add the adjusted trial balance columns to prove the equality of debits and credits 8. The
adjusted trial balances are extended to the Statement of Financial Position and Income
Statement columns. Assets, liabilities, and capital are extended to the statement of
financial position columns and income and expenses are extended to the income statement
columns. The new column in a 12-column worksheet is the Cost of Sales column. This
column contains the merchandise inventory at the beginning of the period (debit) and the
merchandise inventory end of the period (credit). Also in this column are purchases, freight
in, purchase returns and allowances, and purchase discount. So from
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the adjusted TB extend these accounts to the Cost of Sales. Then add the columns of the Cost
of Sales. Get the difference (Cost of Sales) and extend to the debit side of the Income
Statement column. Add the last four columns. Get the difference of the debit and credit sides of
the Income Statement and the difference of the debit and credit sides of the Statement of
Financial Position. The difference of both should be equal. Otherwise, an error or errors may
have been committed.
If the credit total of the income statement (income) is more than the debit total (expenses), the
difference is a net profit. If the debit side (expenses) is more than the credit side (income), the
difference is a net loss. Write the difference below the smaller sides.
9. Write in the column for account titles “Net Profit” if the difference is a net profit or “Net Loss”
if the difference is a net loss
10. Write the final totals and double rule.
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C. ADDITIONAL READINGS
1. Fundamentals of Accounting by Amelia M. Arganda
2. Conceptual Framework and Accounting Standards by Zeus Millan 3.
Financial Accounting and Reporting For Services and Merchandisers by
Zenaida Manuel
4. Fundamentals of Accountancy, Business and Management by Rodiel C.
Ferrer
D. EXERCISES
1. Direction: Answer the following exercises, then send your answers to my private
messenger.
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