8. Assume the fiscal year-end is December 31, 2019. Prepare an income statement, statement of changes in equity, and balance sheet. 9. Prepare closing entries and a post-closing trial balance at December 31, 2019.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
I need help figuring the last part of B. numbers 8 and 9 out. I underlined the ones I need help with.
Roth Contractors Corporation was incorporated on December 1, 2019
and had the following transactions during December:
Part A
a. Issued common stock for $5,000 cash
b. Paid $1,200 cash for three months’ rent: December 2019;
January and February 2020
c. Purchased a used truck for $10,000 on credit (recorded as an
account payable)
d. Purchased $1,000 of supplies on credit. These are expected to
be used during the month (recorded as expense)
e. Paid $1,800 for a one-year truck insurance policy, effective
December 1
f. Billed a customer $4,500 for work completed to date
g. Collected $800 for work completed to date
h. Paid the following expenses in cash: advertising, $350; interest,
$100; telephone, $75; truck operating, $425; wages, $2,500
i. Collected $2,000 of the amount billed in f above
j. Billed customers $6,500 for work completed to date
k. Signed a $9,000 contract for work to be performed in January
2020
l. Paid the following expenses in cash: advertising, $200; interest,
$150; truck operating, $375; wages, $2,500
m. Collected a $2,000 advance on work to be done in January (the
policy of the corporation is to record such advances as revenue
at the time they are received)
n. Received a bill for $100 for electricity used during the month
(recorded as utilities expense).
Required:
1. Open general ledger T-accounts for the following: Cash, Accounts
Receivable, Prepaid Insurance, Prepaid Rent, Truck, Accounts
Payable, Common Stock, Repair Revenue, Advertising Expense,
Interest Expense, Supplies Expense, Telephone Expense, Truck
Operating Expense, Utilities Expense, and Wages Expense. General
ledger account numbers are not necessary.
2. Prepare
General ledger account numbers and descriptions are not needed.
3.
Part B
The following information relates to December 31, 2019:
o. One month of the prepaid insurance has expired.
p. The December portion of the rent paid on December 1 has
expired.
q. A physical count indicates that $350 of supplies is still on hand.
r. The amount collected in transaction m is unearned at December
31.
s. Three days of wages for December 29, 30, and 31 are unpaid,
amounting to $1,500. These will be paid in January.
t. The truck has an estimated useful life of 4 years.
u. Income taxes expense is $500. This amount will be paid in the
next fiscal year.
Required:
4. Open additional general ledger T-accounts for the following:
Unused Supplies, Accumulated
Unearned Revenue, Income Taxes Payable, Depreciation Expense,
Insurance Expense, Rent Expense, and Income Taxes Expense.
General ledger account numbers are not necessary.
5. Prepare all necessary
numbers and descriptions are not necessary.
6. Post the entries to general ledger T-accounts and calculate
balances.
7. Prepare an adjusted
8. Assume the fiscal year-end is December 31, 2019. Prepare an
income statement, statement of changes in equity, and balance
sheet.
9. Prepare closing entries and a post-closing trial balance at
December 31, 2019.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 5 images
