Light-It-Up Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Light-It-Up Company prepared the following end-of-period spreadsheet at August 31, 20Y5, the end of the fiscal year: Light-It-Up Company End-of-Period Spreadsheet For the Year Ended August 31, 20Y5 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 10,800 10,800 Accounts Receivable 38,900 5,000 43,900 Prepaid Insurance 4,200 3,150 1,050 Supplies 2,730 2,180 550 Land 98,000 98,000 Building 400,000 400,000 Accumulated Depreciation-Building 205,300 12,000 217,300 Equipment 101,000 101,000 Accumulated Depreciation-Equipment 85,100 4,800 89,900 Accounts Payable 15,700 15,700 Salaries and Wages Payable 4,100 4,100 Unearned Rent 2,100 900 1,200 Common Stock 75,000 75,000 Retained Earnings 137,100 137,100 Dividends 10,000 10,000 Fees Earned 425,000 5,000 430,000 Rent Revenue 900 900 Salaries and Wages Expense 219,400 4,100 223,500 Advertising Expense 30,700 30,700 Utilities Expense 16,400 16,400 Depreciation Expense-Building 12,000 12,000 Repairs Expense 8,850 8,850 Depreciation Expense-Equipment 4,800 4,800 Insurance Expense 3,150 3,150 Supplies Expense 2,180 2,180 Miscellaneous Expense 4,320 4,320 945,300 945,300 32,130 32,130 971,200 971,200 Income Statement? Statement of Stockholder's Equity? Balance Sheet?
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.
| Light-It-Up Company | ||||||
| End-of-Period Spreadsheet | ||||||
| For the Year Ended August 31, 20Y5 | ||||||
| Unadjusted |
Adjustments | Adjusted Trial Balance | ||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
| Cash | 10,800 | 10,800 | ||||
| Accounts Receivable | 38,900 | 5,000 | 43,900 | |||
| Prepaid Insurance | 4,200 | 3,150 | 1,050 | |||
| Supplies | 2,730 | 2,180 | 550 | |||
| Land | 98,000 | 98,000 | ||||
| Building | 400,000 | 400,000 | ||||
| 205,300 | 12,000 | 217,300 | ||||
| Equipment | 101,000 | 101,000 | ||||
| Accumulated Depreciation-Equipment | 85,100 | 4,800 | 89,900 | |||
| Accounts Payable | 15,700 | 15,700 | ||||
| Salaries and Wages Payable | 4,100 | 4,100 | ||||
| Unearned Rent | 2,100 | 900 | 1,200 | |||
| Common Stock | 75,000 | 75,000 | ||||
| 137,100 | 137,100 | |||||
| Dividends | 10,000 | 10,000 | ||||
| Fees Earned | 425,000 | 5,000 | 430,000 | |||
| Rent Revenue | 900 | 900 | ||||
| Salaries and Wages Expense | 219,400 | 4,100 | 223,500 | |||
| Advertising Expense | 30,700 | 30,700 | ||||
| Utilities Expense | 16,400 | 16,400 | ||||
| Depreciation Expense-Building | 12,000 | 12,000 | ||||
| Repairs Expense | 8,850 | 8,850 | ||||
| Depreciation Expense-Equipment | 4,800 | 4,800 | ||||
| Insurance Expense | 3,150 | 3,150 | ||||
| Supplies Expense | 2,180 | 2,180 | ||||
| Miscellaneous Expense | 4,320 | 4,320 | ||||
| 945,300 | 945,300 | 32,130 | 32,130 | 971,200 | 971,200 |
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