ISBS PrePaid and Accrued Expenses 2

g	item needed to calculate gross profit
fa	Fixed Asset
ca	current asset
cl	current liability
fl	fixed liability
d	information needed for calculation
pe	prepaid expense
ae	accrued expense

Use "ADD" for Allowance for doubtful debts.
ADD increase/decrease in the income statement, "Less ADD" in Balance Sheet.

"asset name depreciation" in the income statement, "less accumulated depreciation" in the balance sheet.

Expenses as named in the trial balance for the income statement.
"prepaid expense" in the Balance Sheet (e.g. "prepaid insurance").
"Accrued expense" in the Balance sheet (e.g. "accrued wages").



ID	Trial Balance (TB)	DR	CR
	Loan (repay in 5 years)		£135,000
	Capital		£428,525
	Commissions	£2,400
	Purchases and Sales	£64,600	£547,900
	Rent Received		£35,400
	Land	£150,000
	Accounts Payable		£24,800
	Discounts allowed	£1,800
	Accounts Receivable	£7,300
	General Expenses	£1,350
	Accumulated depreciation (Premises)
	Carriage Out	£2,600
	Bad Debts	£1,500
	Returns	£4,100	£6,400
	Carriage In	£4,300
	Drawings	£7,400
	Discounts Received		£3,400
	Insurance	£3,500
	Loan Interest
	Accumulated depreciation (Equip)		£6,100
	Premises	£850,000
	Motor Expenses	£6,500
	Bank	£12,600
	Equipment	£135,000
	Allowance for doubtful debts		£2,500
	Salaries	£45,900
	Opening Inventory	7400
	Cash	£3,200


End of Year Adjustments:
Closing Inventory		8600
Allowance for Doubtful Debts rate		4%	of debtors
Depreciation		Method:
3%		straight line
5%		reducing balance
	Insurance is prepaid	£350
3	months owing on loan interest at	6%	of loan p.a.
	Motor Expenses are prepaid by	£450
	Accrual required on Salaries of	£2,500

	Income Statement	£	£














	EOYA


	Less Expenses (use TB order)





	EOYA Expenses (use EOYA order)









	Balance Sheet	£	£	£
	Fixed Assets (use TB order)






	Current Assets (use TB order)





	EOYA




	Current Liabilities (use TB order)

	EOYA



	Fixed Liabilities