How to Create a Worksheet for a Corporation

Step by Step Instructions

Always start with the name of the company, the title of the statement, and the period for which the statement is being prepared. In the case of a worksheet it is for the month, year or fiscal period ending and the date in which that period ended.

Trial Balance:

Step 1. From the general ledger list all accounts even if they do not have a balance because you want them in order. The order is assets, liabilities, owner’s equity, revenues, and expenses. Place the balance before adjustments in the trial balance column. Assets, withdrawal, and expense amounts are placed in the debit column while liabilities, stockholder’s equity and revenues amounts are place in the credit column.

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Step 2. Make sure to total these two columns and that they balance (end amounts are the same) before you continue with the worksheet. Double underline the totals once they balance. If for any reason they do not balance check your math and check for errors in your general ledger.

Adjustments:

Step 3. In the next two columns (debit and credit) place the end of the period adjustments. You may want to journalize these adjustments before placing them on the worksheet.

In this example we have adjustments a through g.a. $600 in revenue that has been earned but not yet recognized by the company.

Accounts Receivable 600 Pet Supplies Revenue 600

b. Supplies on hand were $500 therefore $300 in supplies was used during the period.Supplies Expense 300

Supplies 300c. Depreciation on the building was $500 for the period.

Depreciation expense 500 Accumulated Depreciation—Building 500

d. Depreciation on the equipment was $250 for the period.Depreciation expense 250

Accumulated Depreciation—Equipment 250e. Prepaid rent that was used up during this fiscal period was $700.

Rent Expense 700Prepaid Rent 700

f. Salaries and Wages earned but not yet paid for this fiscal period amounted to $600.Salaries and Wages Expense 600

Salaries and Wages Payable 600g. Revenues received prior to the work being performed that were earned but not yet

recognized was $150.Unearned Pet Supplies Revenue 150

Pet Supplies Revenue 150

Adjustments are based on items that experience changes due to the passage of time. These adjustments fall into the categories of: Prepaid Expenses for Short term assets, Prepaid Expenses for long term assets-Depreciation, Prepaid Revenues-Unearned Revenues, and Accrued Revenues-earned but not yet recognized revenues, and Accrued Expenses-expenses incurred but not yet recognized.

Step 4. After you have placed the adjustments in the adjustments columns total these two columns to make sure they balance. Don’t forget to double underline the totals.

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Adjusted Trial Balance:

Step 5. For each line item in the assets, dividends, and expenses you will take the amount from the trail balance account then add the debit and subtract the credit from the adjustments columns. The other way is to post the adjustments to the general ledger and then list the balances after adjustments.

Step 6. For each line item in the liabilities, stockholder’s equity, and revenues you will take the amount from the trail balance account then subtract the debit and add the credit from the adjustments columns. Again the other way is to post the adjustments to the general ledger and then list the balances after adjustments.

Step 7. Now total both columns in the adjusted trial balance section of the work sheet these amounts should be the same if not recheck your math and make sure everything was added and subtracted correctly. Double underline the totals at the bottom.

Income Statement:

Step 8. For this section of the worksheet you will bring over from the adjusted trial balance columns the revenues to the credit column.

Step 9. Bring over the expenses from the adjusted trial balance columns to the debit column of the income statement section.

Step 10. Total these two columns they will not match. Subtract the smaller amount from the larger amount this will give you the value of either the net income or net loss.

Step 11. If the amount is net income then place the different between the two totals on the debit side under the total and then on the next line down add the two amounts which should equal the credit amount. Place the credit balance on the same line as the new debit balance. If the amount is a net loss place the different in the credit column and then total the amounts. Then double underline both totals.

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Balance Sheet:

Step 12. For this section of the worksheet bring over from the adjusted trial balance all of the assets, liabilities and stockholder’s equity accounts. You will place the assets and dividend amounts in the debit column and the liabilities, stockholder’s equity accounts in the credit column for this section.

Step 13. Total both columns in this section they will not balance. Then bring over the net income and place it in the credit column of this section. If it is a net loss place it in the debit column then total again in which case both columns should balance to the same amount. Double underline both columns. Note: the final balance in the balance sheet section of the worksheet will not match the balance on your balance sheet due to the lack of an stockholder’s equity statement.

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