Below are the details from the books of Fallen Moon Legal Service. FALLEN MOON Legal Service Owned and Operated by John Lloyd Cruz Unadjusted Trial Balance December 31, 20x0 Acct No. Account title Debit Credit 101 Cash 78,400 102 Accounts Receivable 8,900 106 Office Supplies 2,500 105 Prepaid Insurance 6,000 108 Furniture and Equipment 75,000 201 Accounts Payable 30,000 205 Loan Payable 60,000 301 John Lloyd Cruz, Capital 60,000 302 John Lloyd Cruz, Drawing 12,000 44,400 401 Legal Fees 501 Salary Expense 5,500 503 Advertising Expense 3,600 504 Utilities Expense 1,500 509 Miscellaneous Expense 1,000 194,400 194,400 Total The expanded chart of Accounts Listed below will be used as reference: Acct No. Account title Acct No. 101 Cash Account title Legal Fees 401 102 Accounts Receivable 501 Salary Expense 104 Prepaid Advertising 502 Rent Expense 105 Prepaid Insurance 503 Advertising Expense 106 Office Supplies 504 Utilities Expense 108 Furniture and Equipment 505 Insurance Expense 109 Accumulated Depreciation 506 Supplies Expense 201 Accounts Payable 507 Depreciation Expense 202 Accrued Rent Expense 509 Miscellaneous Expense Interest Expense 203 Accrued Interest Expense 510 204 Unearned Legal Fees 205 Loans Payable 301 John Lloyd Cruz, Capital 302 John Lloyd Cruz, Drawing Total moon Additional Information 1. The one year P6,000 insurance paid and effectivity was on December 1, 20x0. 2. Office Rental of P4,000 for the month of December 20x0 was still unpaid. 3. Interest of 18% per annum on the P60,000 bank loan granted on December 11, 20x0 has accrued. 4. Advertising placement of P3,600 for three (3) months was effective on December 1, 20x0. 5. Fees of P5,000 collected in advance on December 30 will be for services to be rendered next year. 6. Office Supplies unused at the end of the month amounted to P1,600 7. Furniture and Equipment are estimated to have a useful life of ten years. It was decided to provide depreciation for December 20x0. Requirement the naraccary adiustino inuals on Nanamb 31, 20 Coneral 1 ade (1-Accoum ancauy prov 2. FUN 3. Prepare the Adjusted Trial Balance as of December 31, 20x0. (Proforma already provided)
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.
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