Preparing financial statements and evaluating business performance Presented here are the accounts of Quick and EZ Delivery Corporation for the year ended December 31, 2020. Land $ 7,000 Common stock $ 32,000 Note payable 30,000 Accounts payable 14,000 Property tax expense 2,900 Accounts receivable 1,700 Dividends 32,000 Advertising expense 17,000 Rent expense 13,000 Building 137,900 Salary expense 69,000 Cash 6,000 Salary payable 500 Equipment 17,000 Service revenue 192,000 Insurance expense 2,000 Supplies 8,000 Interest expense 6,000 Retained earnings, 12/31/2019 51,000 Requirements 1. Prepare Quick and EZ Delivery Corporation’s income statement. 2. Prepare the statement of retained earnings. 3. Prepare the 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.
| Preparing financial statements and evaluating business performance | ||||||
| Presented here are the accounts of Quick and EZ Delivery Corporation for the year ended December 31, 2020. | ||||||
| Land | $ 7,000 | Common stock | $ 32,000 | |||
| Note payable | 30,000 | Accounts payable | 14,000 | |||
| Property tax expense | 2,900 | Accounts receivable | 1,700 | |||
| Dividends | 32,000 | Advertising expense | 17,000 | |||
| Rent expense | 13,000 | Building | 137,900 | |||
| Salary expense | 69,000 | Cash | 6,000 | |||
| Salary payable | 500 | Equipment | 17,000 | |||
| Service revenue | 192,000 | Insurance expense | 2,000 | |||
| Supplies | 8,000 | Interest expense | 6,000 | |||
| 51,000 | ||||||
| Requirements | ||||||
| 1. Prepare Quick and EZ Delivery Corporation’s income statement. | ||||||
| 2. Prepare the statement of retained earnings. | ||||||
| 3. Prepare the balance sheet. | ||||||
| 4. Answer these questions about the company: | ||||||
| a. Was the result of operations for the year a |
||||||
| b. How much in total economic resources does the company have as it moves into the new year? | ||||||
| c. How much does the company owe to creditors? | ||||||
| d. What is the dollar amount of the |
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