Be sure to update the balances of supplies and prepaid insurance. Extend all revenue and expense accounts to the Income Statement. Be sure to update the balances of insurance and supplies expense. Figure the net income or net loss. If you have an error that is evenly divisible by 9, you have a transposition error.
Pencil foot the credit and credit columns.
Figure the account balance. Liabilities balances on the Credit side. Capital balances on the Credit side. Balance Sheet 2. This amount should agree with the amount on the work sheet.