Jan Olsen is a lawyer specializing in estate law. A trial balance was taken on December 31, 20--. Jan Olsen, Attorney Trial Balance For Year Ended December 31, 20-- Account Title Debit Credit Cash 15,000 Accounts Receivable 8,750 Office Supplies 1,000 Prepaid Insurance 1,400 Computer Equipment 27,300 Accum. Depr.—Comp. Equip. Accounts Payable 11,550 Wages Payable J. Olsen, Capital 28,000 J. Olsen, Drawing 2,800 Client Fees 40,000 Rent Expense 6,000 Wages Expense 14,000 Telephone Expense 1,100 Office Supplies Expense Insurance Expense Depr. Exp.—Comp. Equip. Utilities Expense 2,200 79,550 79,550 a. Office supplies on hand at year-end amounted to $650. b. Expired insurance amounted to $900. c. Depreciation on the computer equipment, $1,150. d. Wages earned but not paid as of December 31, $1,230. Complete the year-end adjusting entries and extend the appropriate balances to the Adjusted Trial Balance columns of the work sheet. If an amount box does not require an entry, leave it blank. Jan Olsen, Attorney Work Sheet (partial) For Year Ended December 31, 20-- Trial Balance Adjustments Adjusted Trial Balance Account Title Debit Credit Debit Credit Debit Credit Cash 15,000 Accounts Receivable 8,750 Office Supplies 1,000 Prepaid Insurance 1,400 Computer Equipment 27,300 Accum. Depr.—Comp. Equip. Accounts Payable 11,550 Wages Payable J. Olsen, Capital 28,000 J. Olsen, Drawing 2,800 Client Fees 40,000 Rent Expense 6,000 Wages Expense 14,000 Telephone Expense 1,100 Office Supplies Expense Insurance Expense Depr. Exp.—Comp. Equip. Utilities Expense 2,200 79,550 79,550 Journalize the four adjusting entries exactly as shown in the Adjustments column of the work sheet. If an amount box does not require an entry, leave it blank. Page: 1 DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 20-- Adjusting Entries 1 2 Dec. 31 2 3 3 4 Dec. 31 4 5 5 6 Dec. 31 6 7 7 8 Dec. 31 8 9 9
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.
Jan Olsen is a lawyer specializing in estate law. A
| Jan Olsen, Attorney Trial Balance For Year Ended December 31, 20-- |
||
| Account Title | Debit | Credit |
| Cash | 15,000 | |
| Accounts Receivable | 8,750 | |
| Office Supplies | 1,000 | |
| Prepaid Insurance | 1,400 | |
| Computer Equipment | 27,300 | |
| Accum. Depr.—Comp. Equip. | ||
| Accounts Payable | 11,550 | |
| Wages Payable | ||
| J. Olsen, Capital | 28,000 | |
| J. Olsen, Drawing | 2,800 | |
| Client Fees | 40,000 | |
| Rent Expense | 6,000 | |
| Wages Expense | 14,000 | |
| Telephone Expense | 1,100 | |
| Office Supplies Expense | ||
| Insurance Expense | ||
| Depr. Exp.—Comp. Equip. | ||
| Utilities Expense | 2,200 | |
| 79,550 | 79,550 |
| a. | Office supplies on hand at year-end amounted to $650. |
| b. | Expired insurance amounted to $900. |
| c. | |
| d. | Wages earned but not paid as of December 31, $1,230. |
Complete the year-end
| Jan Olsen, Attorney Work Sheet (partial) For Year Ended December 31, 20-- |
||||||||||
| Trial Balance | Adjustments | Adjusted Trial Balance | ||||||||
| Account Title | Debit | Credit | Debit | Credit | Debit | Credit | ||||
| Cash | 15,000 | |||||||||
| Accounts Receivable | 8,750 | |||||||||
| Office Supplies | 1,000 | |||||||||
| Prepaid Insurance | 1,400 | |||||||||
| Computer Equipment | 27,300 | |||||||||
| Accum. Depr.—Comp. Equip. | ||||||||||
| Accounts Payable | 11,550 | |||||||||
| Wages Payable | ||||||||||
| J. Olsen, Capital | 28,000 | |||||||||
| J. Olsen, Drawing | 2,800 | |||||||||
| Client Fees | 40,000 | |||||||||
| Rent Expense | 6,000 | |||||||||
| Wages Expense | 14,000 | |||||||||
| Telephone Expense | 1,100 | |||||||||
| Office Supplies Expense | ||||||||||
| Insurance Expense | ||||||||||
| Depr. Exp.—Comp. Equip. | ||||||||||
| Utilities Expense | 2,200 | |||||||||
| 79,550 | 79,550 |
Journalize the four adjusting entries exactly as shown in the Adjustments column of the work sheet. If an amount box does not require an entry, leave it blank.
| DATE | DESCRIPTION | POST. REF. |
DEBIT | CREDIT | ||
|---|---|---|---|---|---|---|
| 1 | 20-- | Adjusting Entries | 1 | |||
| 2 | Dec. 31 | 2 | ||||
| 3 | 3 | |||||
| 4 | Dec. 31 | 4 | ||||
| 5 | 5 | |||||
| 6 | Dec. 31 | 6 | ||||
| 7 | 7 | |||||
| 8 | Dec. 31 | 8 | ||||
| 9 | 9 |
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