Consider the following situations for Bookfield Welding Services: (Click the icon to view the situations.) Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) CI a. Depreciation for the current year includes Equipment, $2,000. X Date Accounts and Explanation Debit Cre More info (a) Dec. 31 a. Depreciation for the current year includes equipment, $2,000. b. Each Monday, Bookfield pays employees for the previous week's work. The amount of weekly payroll is $1,400 for a seven-day workweek (Monday to Sunday). This year, December 31 falls on Thursday. c. The beginning balance of Office Supplies was $2,200. During the year, Bookfield purchased office supplies for $2,700, and at December 31 the office supplies on hand totaled $2,000. d. Bookfield prepaid a two full years' insurance on October 1 of the current year, $4,800. Record insurance expense for the year ended December 31. e. Bookfield had earned $3,200 of unearned revenue. f. Bookfield had incurred (but not recorded) $110 of interest expense on a note payable. The interest will not be paid until February 28. g. Bookfield billed customers $4,000 for welding services performed.
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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