Additional information for Dec 30 2020 not yet recorded: a. Unbilled and uncollected work to December 30 totals $135,000. b. An analysis of prepaid advertising shows that $1,500 of the balance was consumed. с. A shop supplies count on December 30 shows that $3,600 are on hand. d. Equipment has an estimated useful life of ten years and an estimated residual value of $1,500. е. The records show that fifty percent of the work, for a $30,000 fee received in advance from a customer and recorded in July, is now completed. f. Salaries of $17,400 for employees for work done to the end of December has not been paid. g. Utilities invoice for services to December 22 totals $10,500. h. Accrued revenues of $23,400 previously recorded to accounts receivable were collected. i. A building was purchased at the end of November. Its estimated useful life is fifty years and has an estimated residual value of $30,000. j. Rent expense of $15,000 cash for July has been paid and recorded directly to rent expense. j. Interest for the 6% note payable has not yet been recorded for December. k. Income taxes of $9,000 is owing but not yet paid. 1. Unrecorded and uncollected service revenue of $27,000 has been earned.
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.
Prepare the adjusting and correcting enteries with narrations for December 30th
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