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Q. Example of Trial Balance columns?
Start by extending all of Micro Train's revenue and expense account balances in the Adjusted Trial Balance columns to the Income Statement columns. Ever since revenues hold credit balances extend them to the credit column. Subsequent to extending expenses to the debit column subtotal each column. Micro Train's total expenses are USD 6510 and total revenues are USD 13800. Therefore net income for the period is USD 7290 USD 13800-USD 6510. File this USD 7290 income in the debit column to make the two column totals balance. You would file a net loss in the opposite manner expenses (debits) would have been larger than revenues (credits) thus a net loss would be entered in the credit column to make the columns balance. Subsequently complete the Statement of Retained Earnings columns. File the USD 7290 net income amount for December in the credit Statement of Retained Earnings column. Therefore this net income amount is the balancing figure for the Income Statement columns and is as well in the credit Statement of Retained Earnings column. Net income shows in the Statement of Retained Earnings credit column because it causes an increase in retained earnings. Put in the USD 7290 net income to the beginning retained earnings balance of USD 0 and deduct the dividends of USD 3000. Consequently the ending balance of the Retained Earnings account is USD 4290.
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