Prepare a classified balance sheet using the following information from Tonya Tinker's Tool Company April 30, 2015 post-closing trial balance: Account Debit Credit Cash 31,000 Short-Term Investments 43,500 Accounts Receivable 239,000 Merchandise Inventory 113,000 Notes Receivable 10,000 Interest Payable 930 Sales Supplies 1,280 Office Supplies 540 Deposit for Future Advertising 3,120 Long-Term Notes Payable 99,000 Land 34,700 Delivery Equipment 42,230 Accumulated Depreciation-Delivery Equipment 28,400 Building, Not in Use 72,100 Accounts Payable 129,600 Salaries Payable 4,600 Prepaid Rent 1,800 Prepaid Insurance 3,600 T. Tinker, Capital 337,340 Trademark 4,000
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.
Prepare a classified
| Account | Debit | Credit |
| Cash | 31,000 | |
| Short-Term Investments | 43,500 | |
| 239,000 | ||
| Merchandise Inventory | 113,000 | |
| Notes Receivable | 10,000 | |
| Interest Payable | 930 | |
| Sales Supplies | 1,280 | |
| Office Supplies | 540 | |
| Deposit for Future Advertising | 3,120 | |
| Long-Term Notes Payable | 99,000 | |
| Land | 34,700 | |
| Delivery Equipment | 42,230 | |
| Accumulated |
28,400 | |
| Building, Not in Use | 72,100 | |
| Accounts Payable | 129,600 | |
| Salaries Payable | 4,600 | |
| Prepaid Rent | 1,800 | |
| Prepaid Insurance | 3,600 | |
| T. Tinker, Capital | 337,340 | |
| Trademark | 4,000 |
The balance sheet is also known as the statement of financial position considered as one of the most important financial statements. It is a statement that has a summary of Assets, Liabilities, and Equity of a business at a point in time.
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