I need to prepare an Income Statement for the attached Adjusted Trial Balance that I just prepared accordingly. I started the Income Statement and realize it gets recorded by larger items first. There are no fees earned ... just capital stock. Would I begin with Capital Stock ? BELLA COMPUTERS ADJUSTED TRIAL BALANCE PERIOD ENDING JUNE 30, 2020 DESCRIPTION DEBIT CREDIT CASH $ 319,620 DEPOSIT ELECTRIC COMPANY $ 500 DEPOSIT WATER SEWER GARBAGE $ 200 DEPOSIT TELEPHONE $ 250 OFFICE SUPPLIES $ 500 PREPAID INSURANCE $ 3,600 PREPAID LEASE $ 11,000 MACHINERY & EQUIPMENT $ 100,000 FURNITURE & FIXTURES $ 20,000 ACCUMULATED DEPRECIATION - FURNITURE & FIXTURES $ 167 ACCUMULATED DEPRECIATION - MACHINERY & EQUIPMENT $ 1,190 ACCOUNTS PAYABLE $ 1,200 UNEARNED REVENUE $ 50,000 NOTES PAYABLE - FURNITURE & FIXTURES $ 20,000 NOTES PAYABLE - MACHINERY & EQUIPMENT $ 90,000 CAPITAL STOCK $ 300,000 WAGES PAYABLE $ 450.00 ACCOUNTING & LEGAL EXPENSE $ 2,500 INDEPENDENT CONTRACTOR $ 900 UTILITIES EXPENSE $ 430 SUPPLIES EXPENSE $ 700 DEPRECIATION - FURNITURE & FIXTURES $ 167 DEPRECIATION - MACHINERY & EQUIPMENT $ 1,190 LEASE EXPENSE $ 1,000 INDEPENDENT CONTRACTOR $ 450 $ 463,007 $ 463,007
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 to prepare an Income Statement for the attached Adjusted
| BELLA COMPUTERS | ||
| ADJUSTED TRIAL BALANCE | ||
| PERIOD ENDING JUNE 30, 2020 | ||
| DESCRIPTION | DEBIT | CREDIT |
| CASH | $ 319,620 | |
| DEPOSIT ELECTRIC COMPANY | $ 500 | |
| DEPOSIT WATER SEWER GARBAGE | $ 200 | |
| DEPOSIT TELEPHONE | $ 250 | |
| OFFICE SUPPLIES | $ 500 | |
| PREPAID INSURANCE | $ 3,600 | |
| PREPAID LEASE | $ 11,000 | |
| MACHINERY & EQUIPMENT | $ 100,000 | |
| FURNITURE & FIXTURES | $ 20,000 | |
| $ 167 | ||
| ACCUMULATED DEPRECIATION - MACHINERY & EQUIPMENT | $ 1,190 | |
| ACCOUNTS PAYABLE | $ 1,200 | |
| UNEARNED REVENUE | $ 50,000 | |
| NOTES PAYABLE - FURNITURE & FIXTURES | $ 20,000 | |
| NOTES PAYABLE - MACHINERY & EQUIPMENT | $ 90,000 | |
| CAPITAL STOCK | $ 300,000 | |
| WAGES PAYABLE | $ 450.00 | |
| ACCOUNTING & LEGAL EXPENSE | $ 2,500 | |
| INDEPENDENT CONTRACTOR | $ 900 | |
| UTILITIES EXPENSE | $ 430 | |
| SUPPLIES EXPENSE | $ 700 | |
| DEPRECIATION - FURNITURE & FIXTURES | $ 167 | |
| DEPRECIATION - MACHINERY & EQUIPMENT | $ 1,190 | |
| LEASE EXPENSE | $ 1,000 | |
| INDEPENDENT CONTRACTOR | $ 450 | |
| $ 463,007 | $ 463,007 |
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