Step 1

1. Step 1 • The six-column work sheet prepares you for the eight-column work sheet in Chapter 9 • Step 1: Write in the heading • Indicate the fiscal period

2. Step 2 • Step 2: Enter, total, and rule the trial balance

3. Step 3 • Step 3: Copy the balance sheet amounts to the balance sheet columns

4. Step 4 • Step 4: Copy the income statement amounts to the income stmt. columns

5. Step 5 Total Revenue Total Expenses Net Income(the balancing figure) • Step 5: Rule and total the last four columns

6. Step 6 • Step 6: Record the net income in the outer two of the last four columns

7. Step 7 • Step 7: Total and rule the work sheet

8. Net Loss 1 Changes shown in red. Total Expenses are now higher than Total Revenue. • Net Loss Situation: Assume Wages and Bank Loan were $40,000 higher

9. Net Loss 2 • The amount of the net loss is placed in the inner two of the last four columns

10. Net Loss 3 • Rule and total the work sheet for a loss situation