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Chapter 4: Q11RQ (page 216)

If a business had a net loss for the year, where would the net loss be reported on the worksheet?

Short Answer

Expert verified

Answer

Net loss will be reported in credit side of the income statement and debit side in the balance sheet.

Step by step solution

01

Explanation on Worksheet

Worksheet is a financial document which reports the effect the transactions in the various financial statements.

02

Reporting of Net Loss

When expenses (debit side) are higher than the revenues (credit side), then it is loss which will be reported in credit side. This loss will be transferred to debit side of the balance sheet.

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Most popular questions from this chapter

For each account listed, identify the category in which it would appear on a classified balance sheet.

5. Unearned Revenue

E4-20 Preparing financial statements from the completed worksheet Use your answer from Exercise E4-19 to prepare Data Solution’s financial statements. Requirements 1. Complete the income statement for the month ended November 30, 2018. 2. Complete the statement of retained earnings for the month ended November 30, 2018. Assume beginning Retained Earnings was $0. 3. Complete the classified balance sheet as of November 30, 2018. Use the report form.

For each account listed, identify the category in which it would appear on a classified balance sheet.

3. Land

This problem continues the Canyon Canoe Company situation from Chapter 3.

Requirements

1. Complete the worksheet at December 31, 2018 (optional). Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement for the two months ended December 31, 2018. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare a statement of retained earnings for the two months ended December 31, 2018.

4. Prepare a classified balance sheet (report form) at December 31, 2018. Assume the note payable is long-term.

5. Journalize and post the closing entries at December 31, 2018. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance for each account. Denote each closing amount as Clos.and each account balance as Balance.

6. Prepare a post-closing trial balance at December 31, 2018.

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

17. Service Revenue
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