Q#6 As of December 31, the end of the current year, the account for Asad Company prepared a trial balance and an adjusted trial balance. The two trial balances are as follows: Trial Balance Adjusted Trial Balance Name of Accounts Debit Credit Debit Credit Cash 19,750 19,750 Account Receivable 10,400 10,400 Supplies 9,880 3,460 Prepaid Insurance 2,700 700 Land 47,500 47,500 Building 107,480 107,480 Accumulated Depreciation-Building 79,600 84,400 Truck 72,000 72,000 Accumulated Depreciation-Truck 32,800 50,900 Account Payable 8,920 9,520 Salaries Payable - 1,450 Unearned Service Fees 7,500 920 Asad, Capital 93,890 93,890 Asad, Drawing 24,000 24,000 Service Fees Earned 170,680 177,260 Salary Expense 81,200 82,650 Depreciation Expense-Truck - 18,100 Rent Expense 9,600 9,600 Supplied Expense - 6,420 Utilities Expense 6,200 6,800 Depreciation Expense-Buildings - 4,800 Taxes Expense 1,720 1,720 Insurance Expense - 2,000 Miscellaneous Expense 960 960 Total 393,390 393,390 418,340 418,340 Required: Journalize the seven entries that adjusted the accounts at December 31,
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.
Q#6 As of December 31, the end of the current year, the account for Asad Company prepared a
|
|
Trial Balance |
Adjusted Trial Balance |
||
|
Name of Accounts |
Debit |
Credit |
Debit |
Credit |
|
Cash |
19,750 |
19,750 |
||
|
|
10,400 |
10,400 |
||
|
Supplies |
9,880 |
3,460 |
||
|
Prepaid Insurance |
2,700 |
700 |
||
|
Land |
47,500 |
47,500 |
||
|
Building |
107,480 |
107,480 |
||
|
|
79,600 |
84,400 |
||
|
Truck |
72,000 |
72,000 |
||
|
Accumulated Depreciation-Truck |
32,800 |
50,900 |
||
|
Account Payable |
8,920 |
9,520 |
||
|
Salaries Payable |
- |
1,450 |
||
|
Unearned Service Fees |
7,500 |
920 |
||
|
Asad, Capital |
93,890 |
93,890 |
||
|
Asad, Drawing |
24,000 |
24,000 |
||
|
Service Fees Earned |
170,680 |
177,260 |
||
|
Salary Expense |
81,200 |
82,650 |
||
|
Depreciation Expense-Truck |
- |
18,100 |
||
|
Rent Expense |
9,600 |
9,600 |
||
|
Supplied Expense |
- |
6,420 |
||
|
Utilities Expense |
6,200 |
6,800 |
||
|
Depreciation Expense-Buildings |
- |
4,800 |
||
|
Taxes Expense |
1,720 |
1,720 |
||
|
Insurance Expense |
- |
2,000 |
||
|
Miscellaneous Expense |
960 |
960 |
||
|
Total |
393,390 |
393,390 |
418,340 |
418,340 |
Required:
Journalize the seven entries that adjusted the accounts at December 31,
Step by step
Solved in 2 steps
