Gunflint adventures operate an airplane service that take fishing parties to a remote lake season lake resort in northemManitoba, Canada. Individuals must purchase their tickest at least one month in advance during the busy summer season. The company adjusts its accounts only one each month. Selected balances appearing in the company's June 30 adjusted trial balance appear as follows. DEbit Credit Prepaid airport rent.................................................... $9,000 Unexpired insurance................................................... 4,200 Airplane........................................................................288,000 Accumulated depreciations airplane.......................... $80,000 Uneamed passenger revenue..................................... 75,000 Other information 1. The airplane is being depreciated over a 15 year life with no residual value. 2. Unearned passenger revenue represents advance ticket sales for booking in July and August at $300 per ticket. 3. Six months' airport rent had been prepaid on May 1. 4. The unexpired insurance is what remains of a 12 month policy purchased on February 1. 5. Passenger revenue earned June totaled $40,000. I have to determine the following. -The age of airplane in months. -The monthly airport rent. -The amount paid for the 12 month insurance policy on February 1. I have to prepare the adjusting entries made on JUne 30 involving the following accounts. -Depreciation Expense: Airplane -Airplane Rent Expense - Insurance Expense -Passenger revenue 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.
Gunflint adventures operate an airplane service that take fishing parties to a remote lake season lake resort in northemManitoba, Canada. Individuals must purchase their tickest at least one month in advance during the busy summer season. The company adjusts its accounts only one each month. Selected balances appearing in the company's June 30 adjusted
DEbit Credit
Prepaid airport rent.................................................... $9,000
Unexpired insurance................................................... 4,200
Airplane........................................................................288,000
Uneamed passenger revenue..................................... 75,000
Other information
1. The airplane is being
2. Unearned passenger revenue represents advance ticket sales for booking in July and August at $300 per ticket.
3. Six months' airport rent had been prepaid on May 1.
4. The unexpired insurance is what remains of a 12 month policy purchased on February 1.
5. Passenger revenue earned June totaled $40,000.
I have to determine the following.
-The age of airplane in months.
-The monthly airport rent.
-The amount paid for the 12 month insurance policy on February 1.
I have to prepare the
-Depreciation Expense: Airplane
-Airplane Rent Expense
- Insurance Expense
-Passenger revenue Earned
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