The ending balances in the ledger accounts (T-Accounts) after adjusting entries have been recorded will be used to prepare the adjusted trial balance.
All of the accounts, along with the ending balances from the ledger accounts (T-Accounts) from the previous page, are shown below in MM TAX’s adjusted trial balance.
|
-
|
Balance | |
|---|---|---|
|
Account
|
Debit | Credit |
| Cash | $19,900 |
-
|
| Accounts receivable | $3,000 |
-
|
| Office supplies | $20 |
-
|
| Prepaid insurance | $1,100 |
-
|
| Computer | $500 |
-
|
| Accumulated depreciation, computer |
-
|
$21 |
| Accounts payable |
-
|
$50 |
| Unearned revenue |
-
|
$800 |
| Salaries payable |
-
|
$200 |
| Common stock |
-
|
$20,000 |
| Dividends | $200 |
-
|
| Fees earned |
-
|
$4,200 |
| Salaries expense | $400 |
-
|
| Insurance expense | $100 |
-
|
| Office supplies expense | $30 |
-
|
| Depreciation expense | $21 |
-
|
| Total | $25,271 | $25,271 |
The trial balance is then footed, which means we add a column of numbers or get the sum total of those numbers. The total of the debit column should equal the total of the credit column.
The following lesson’s example for MM TAX will start with MM TAX’s adjusted trial balance on December 31, 20XX.
The adjusted trial balance is used to prepare the company’s financial statements. In the next lesson, we will prepare financial statements for MM TAX and prepare the ledger accounts for the next fiscal year.