Chapter 4 Accounting Information Systems 165Financial Statements
Using the adjusted trial balance shown in Exhibit 11, the financial statements for
Online Solutions for the two months ending December 31, 2007, can be prepared. The
income statement, retained earnings statement, balance sheet, and statement of cash
flows for Online Solutions are shown in Exhibit 12.
The income statement, retained earnings statement, and balance sheet for Online
Solutions can be prepared directly from the adjusted trial balance shown in Exhibit 11.
The statement of cash flows is more complex and requires additional analysis of
November and December transactions. In the appendix at the end of this chapter, we
describe and illustrate how Online Solutions’ statement of cash flows is prepared.Exhibit 10
Adjusting Entries for Online Solutions
Online Solutions
Trial Balance
December 31, 2007Debit Credit
Balances Balances
Cash 2,065
Accounts Receivable 2,220
Supplies 2,800
Prepaid Insurance 2,400
Office Equipment 1,800
Land 20,000
Accounts Payable 900
Unearned Rent 360
Capital Stock 25,000
Dividends 4,000
Fees Earned 16,340
Wages Expense 4,275
Rent Expense 1,600
Utilities Expense 985
Miscellaneous Expense 455
42,600 42,600Exhibit 9
Trial Balance for Online
Solutions
Dec. 31 Supplies Expense 2,040
Supplies 2,040
31 Insurance Expense 100
Prepaid Insurance 100
31 Unearned Rent 120
Rent Revenue 120
31 Wages Expense 250
Wages Payable 250
31 Accounts Receivable 500
Fees Earned 500
31 Depreciation Expense 50
Accumulated Depreciation—Office Equipment 50SCF BS IS
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