Kelly Consulting Unadjusted Trial Balance April 30, 2019

Step 4. Assembling and Analyzing Adjustment Data Befoe the financial statements can be prepared, the accounts must be updated. The four types of accounts that normally require adjustment (updating)) include prepaid expenses, unearned revenue, accrued revenue, and accrued expenses. In addition, depreciation expense must be recorded for fixed assets other than land. The following data have been assembled on April 30, 2019 for analysis of possible adjustments for Kelly Consulting:

a. Insurance expired during April is $300

b. Supplies on hand on April are $1,350.

c. Depreciation of office equipment for April is $330.

d. Accrued receptionist salary on April 30 is $120

e. Rent expired during April is $1,600.

f. Unearned fees on April 30 are $2,500.

Step 5. Preparing an Optional End-of-Period Spreadsheet

Although an end-of-period spreadsheet is not required, it is useful in showing the flow of accounting information from the unadjusted trial balance to the adjusted trial balance. In addition, an end-of-period spreadsheet is useful in analyzing the impact of proposed adjustments on the financial statements. The end-of-period spreadsheet for Kelly Consulting is shown in Exhibit 12.

Step 6. Journalizing and Posting Adjusting Entries Based on the adjustment data shown in Step 4, adjusting entries for Kelly Consulting are prepared as shown in Exhibit 13. Each adjusting entry affects at least one income statement account and one balance sheet account. Explanations for each adjustment including an y computations are normally included with each adjusting entry