MARK'S BOWLING ALLEY Adjusted Trial Balance December 31, 2018 Balance Account Title Debit Credit Cash $ 20,000 Accounts Receivable 2,900 Office Supplies 1,150 Prepaid Insurance 2,700 Land 20,000 Building 145,000 Accumulated Depreciation-Building $ 7,000 Equipment 43,000 Accumulated Depreciation-Equipment 20,000 Accounts Payable 4,800 Utilities Payable 625 Salaries Payable 3,800 Unearned Revenue 1,900 Common Stock 106,000 Retained Earnings 114,250 Dividends 31,000 Service Revenue 85,000 Insurance Expense 26,000 Salaries Expense 28,000 Supplies Expense 1,300 Utilities Expense 15,000 Depreciation Expense-Equipment 7,000 Depreciation Expense-Building 325 Total $ 343,375 $ 343,375
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.
Preparing closing entries from an adjusted
Mark’s Bowling Alley’s adjusted trial balance as of December 31, 2018, is presented below:
Requirements
- Prepare the closing entries for Mark’s Bowling Alley.
- Prepare a post-closing trial balance.
- Compute the current ratio for Mark’s Bowling Alley.
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