| AAA Services | |||||||||||||||||||
| Worksheet | |||||||||||||||||||
| for the year end 30 June 2018 | |||||||||||||||||||
| Trial balance | Adjusting entries | Adjusted trial balance | Income statement | Balance sheet | |||||||||||||||
| Accounts Name | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | |||||||||
| Cash | $ 40,860.00 | $ 40,860.00 | $ 40,860.00 | ||||||||||||||||
| Accounts Receivable | $ 11,800.00 | $ 11,800.00 | $ 11,800.00 | ||||||||||||||||
| Office Supplies | $ 45,600.00 | $ 36,960.00 | $ 8,640.00 | $ 8,640.00 | |||||||||||||||
| Prepaid Rent | $ 72,000.00 | $ 24,000.00 | $ 48,000.00 | $ 48,000.00 | |||||||||||||||
| Equipment | $ 1,60,000.00 | $ 1,60,000.00 | $ 1,60,000.00 | ||||||||||||||||
| Accumulated depreciation | $ 2,200.00 | $ 2,200.00 | $ 2,200.00 | ||||||||||||||||
| Accounts Payable | $ 10,400.00 | $ 10,400.00 | $ 10,400.00 | ||||||||||||||||
| Notes Payable | $ 40,000.00 | $ 40,000.00 | $ 40,000.00 | ||||||||||||||||
| Interest Payable | $ 300.00 | $ 300.00 | $ 300.00 | ||||||||||||||||
| Utilities Payable | $ 7,928.00 | $ 7,928.00 | $ 7,928.00 | ||||||||||||||||
| Unearned Revenue | $ 8,000.00 | $ 3,000.00 | $ 5,000.00 | $ 5,000.00 | |||||||||||||||
| Common Stock | $ 2,00,000.00 | $ 2,00,000.00 | $ 2,00,000.00 | ||||||||||||||||
| Retained earnings | $ 3,472.00 | ||||||||||||||||||
| Service Revenue | $ 1,65,200.00 | $ 3,000.00 | $ 1,68,200.00 | $ 1,68,200.00 | |||||||||||||||
| Wages Expense | $ 76,400.00 | $ 76,400.00 | $ 76,400.00 | ||||||||||||||||
| Supplies expenses | $ 36,960.00 | $ 36,960.00 | $ 36,960.00 | ||||||||||||||||
| Rent expenses | $ 24,000.00 | $ 24,000.00 | $ 24,000.00 | ||||||||||||||||
| Miscellaneous Expense | $ 6,940.00 | $ 6,940.00 | $ 6,940.00 | ||||||||||||||||
| Electricity Expense | $ 4,940.00 | $ 4,940.00 | $ 4,940.00 | ||||||||||||||||
| Telephone Expense | $ 2,988.00 | $ 2,988.00 | $ 2,988.00 | ||||||||||||||||
| Depreciation Expense | $ 2,200.00 | $ 2,200.00 | $ 2,200.00 | ||||||||||||||||
| Interest Expense | $ 300.00 | $ 300.00 | $ 300.00 | ||||||||||||||||
| Dividend | $ 10,000.00 | $ 10,000.00 | |||||||||||||||||
| Total | $ 4,31,528.00 | $ 4,31,528.00 | $ 66,460.00 | $ 66,460.00 | $ 4,34,028.00 | $ 4,34,028.00 | $ 2,69,300.00 | $ 2,69,300.00 | |||||||||||
| Profit per month | $ 13,472.00 | ||||||||||||||||||
| Debit | Credit | ||||||||||||||||||
| 30-Jun | Supplies expense a/c | $ 36,960.00 | |||||||||||||||||
| Office supplies | $ 36,960.00 | ||||||||||||||||||
| 30-Jun | Rent expense a/c | $ 24,000.00 | |||||||||||||||||
| Prepaid rent a/c | $ 24,000.00 | ||||||||||||||||||
| 30-Jun | Depreciation expense a/c | $ 2,200.00 | |||||||||||||||||
| Accumulated depreciation a/c | $ 2,200.00 | ||||||||||||||||||
| 30-Jun | Interest Expense a/c | $ 300.00 | |||||||||||||||||
| Interest Payable a/c | $ 300.00 | ||||||||||||||||||
| 30-Jun | Unearned revenue a/c | $ 3,000.00 | |||||||||||||||||
| Service revenue a/c | $ 3,000.00 | ||||||||||||||||||
| AAA Services | |||||||||||||||||||
| Income Statement | |||||||||||||||||||
| For the year ended 31 June 2018 | |||||||||||||||||||
| Particulars | Amount | ||||||||||||||||||
| Service Revenue | $ 1,68,200.00 | ||||||||||||||||||
| Less: operating expenses | |||||||||||||||||||
| Wages Expense | $ 76,400.00 | ||||||||||||||||||
| Supplies expenses | $ 36,960.00 | ||||||||||||||||||
| Rent expenses | $ 24,000.00 | ||||||||||||||||||
| Miscellaneous Expense | $ 6,940.00 | ||||||||||||||||||
| Electricity Expense | $ 4,940.00 | ||||||||||||||||||
| Telephone Expense | $ 2,988.00 | ||||||||||||||||||
| Depreciation Expense | $ 2,200.00 | ||||||||||||||||||
| Interest Expense | $ 300.00 | $ 1,54,728.00 | |||||||||||||||||
| Net income | $ 13,472.00 | ||||||||||||||||||
| AAA Services | |||||||||||||||||||
| Statement of changes in equity | |||||||||||||||||||
| For the year ended 30 June 2018 | |||||||||||||||||||
| Particulars | Share capital | Retained earnings | Total equity | ||||||||||||||||
| Changes in equity for the year 2018 | |||||||||||||||||||
| Issue of share capital | $ 2,00,000.00 | $ 2,00,000.00 | |||||||||||||||||
| Income for the year | $ 13,472.00 | $ 13,472.00 | |||||||||||||||||
| Dividends | -$ 10,000.00 | -$ 10,000.00 | |||||||||||||||||
| Balance at 30 June 2018 | $ 2,00,000.00 | $ 3,472.00 | $ 2,03,472.00 | ||||||||||||||||
| AAA Services | |||||||||||||||||||
| Balance Sheet | |||||||||||||||||||
| As at 31 June 2018 | |||||||||||||||||||
| Particulars | Amount | ||||||||||||||||||
| Assets | |||||||||||||||||||
| Current assets: | |||||||||||||||||||
| Cash | $ 40,860.00 | ||||||||||||||||||
| Accounts Receivable | $ 11,800.00 | ||||||||||||||||||
| Office Supplies | $ 8,640.00 | ||||||||||||||||||
| Prepaid Rent | $ 48,000.00 | ||||||||||||||||||
| Total current assets | $ 1,09,300.00 | ||||||||||||||||||
| Non Current assets: | |||||||||||||||||||
| Equipment | $ 1,60,000.00 | ||||||||||||||||||
| Accumulated depreciation | -$ 2,200.00 | ||||||||||||||||||
| Total non-current assets | $ 1,57,800.00 | ||||||||||||||||||
| Total assets | $ 2,67,100.00 | ||||||||||||||||||
| Equity and Liabilities | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Accounts Payable | $ 10,400.00 | ||||||||||||||||||
| Notes Payable | $ 40,000.00 | ||||||||||||||||||
| Interest Payable | $ 300.00 | ||||||||||||||||||
| Utilities Payable | $ 7,928.00 | ||||||||||||||||||
| Unearned Revenue | $ 5,000.00 | ||||||||||||||||||
| Total liabilities | $ 63,628.00 | ||||||||||||||||||
| Equity: | |||||||||||||||||||
| Common Stock | $ 2,00,000.00 | ||||||||||||||||||
| Retained earnings | $ 3,472.00 | ||||||||||||||||||
| Total equity | $ 2,03,472.00 | ||||||||||||||||||
| Total laibilities and equity | $ 2,67,100.00 | ||||||||||||||||||
| Advantages and disadvantages of using excel spreadsheets | |||||||||||||||||||
| Advantages: | |||||||||||||||||||
| · One of the benefits of using excels spreadsheets for accounting is that it allows entering mathematical formulas correctly and helps in entering the financial data accurately in the accounts. | |||||||||||||||||||
| · The data entered in excel can be edited accordingly and as per the changes required in the financial statements. | |||||||||||||||||||
| · Excel allows the companies to present the financial data in a graphical form such as pie charts and different types of graphs. This enables the users to visualize and interpret the data easily and present the same along with their presentations (1). | |||||||||||||||||||
| · The chances of having a manual error got reduced when the accounts are prepared in excel sheets. The probability of having an error declines because of the formulas used in preparing the statements. | |||||||||||||||||||
| · Spreadsheets help in collecting and organizing data in the simplest form. The information is presented in a proper format being placed in neat columns and rows which facilitates the easy understanding of complex data (1). | |||||||||||||||||||
| · Use of formulas avoids the wastage of time in making repetitive calculations. In excel, once the command is written and set, the same can be copied further in rest of the calculations. As a result, the complex calculations become easy for the accountants and also enhance the accuracy. | |||||||||||||||||||
| · Excel functions like V-Lookup, what-if and many others enable the users to locate a particular type of information from the large collection of data and to get the answers of any questions. | |||||||||||||||||||
| Disadvantages | |||||||||||||||||||
| · In order to preserve the integrity of the data audit trails are the important means of doing it. However, excel does not have the same for the data and formulas. It just updates the files with new information and it is very difficult to identify the user who had worked on the previous part or the specific part of the report. | |||||||||||||||||||
| · Compounding of small errors is one of the major drawbacks of using spreadsheets in creating accounts for the company. If even in one cell, the formula entered is wrong, it can have its impact on the whole calculation down the line. Therefore, excel calculations require proper knowledge and skills for performing the same. | |||||||||||||||||||
| · For the users who are weak at mathematics and are numerically weak cannot use spreadsheets for preparing their accounts. Use of excel requires expertise in programming for the purpose of financial reporting (2). | |||||||||||||||||||
| · Another limitation is the lack of control. Anyone who has access to the worksheets can modify them as per his or her requirements and can show the misleading data to anyone (2). | |||||||||||||||||||
| · It is very difficult to troubleshoot the data in the spreadsheet because they do not allow such feature. When they are saved in different folders or are given to separate departments, it is slightly impossible to conduct the process of quality control. | |||||||||||||||||||
| · Sometimes, it is difficult to update the copies of the original file as they are distributed to various departments and divisions. Changes made in original worksheet cannot be carried further in their copies easily. | |||||||||||||||||||
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References |
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