repare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; Optional Spreadsheet The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: Recessive InteriorsUnadjusted Trial BalanceJanuary 31, 2019 Account No. Debit Balances Credit Balances Cash 11 13,100 Supplies 13 8,000 Prepaid Insurance 14 7,500 Equipment 16 113,000 Accumulated Depreciation-Equipment 17 12,000 Trucks 18 90,000 Accumulated Depreciation-Trucks 19 27,100 Accounts Payable 21 4,500 Jeanne McQuay, Capital 31 126,400 Jeanne McQuay, Drawing 32 3,000 Service Revenue 41 155,000 Wages Expense 51 72,000 Rent Expense 52 7,600 Truck Expense 53 5,350 Miscellaneous Expense 59 5,450 325,000 325,000 The following additional accounts from Recessive Interiors' chart of accounts should be used: Wages Payable, 22; Depreciation Expense-Equipment, 54; Supplies Expense, 55; Depreciation Expense-Trucks, 56; Insurance Expense, 57. The data needed to determine year-end adjustments are as follows: Supplies on hand at January 31 are $2,850. Insurance premiums expired during the year are $3,150. Depreciation of equipment during the year is $5,250. Depreciation of trucks during the year is $4,000. Wages accrued but not paid at January 31 are $900. Use the attached spreadsheet to complete parts 2, 3, and 6. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. Required: 1. For each account listed in the trial balance, notice that the balance has been entered in the appropriate general ledger account balance column of the spreadsheet. Posting to the general ledger will take place in step 3 and step 6. 2. (Optional) In the attached spreadsheet, notice that the unadjusted trial balance amounts have been entered. Enter the adjusting entries and complete the worksheet. 3. Journalize the adjusting entries on page 26 of the journal. Then post to the appropriate accounts in the general ledger in the attached spreadsheet, inserting balances in the accounts affected. Journal PAGE 26 Date Account Post. Ref. Debit Credit a. b. c. d. e. 4. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank. Recessive InteriorsAdjusted Trial BalanceJanuary 31, 2019 Debit Balances Credit Balances 5. Prepare an income statement. Recessive InteriorsIncome StatementFor the Year Ended January 31, 2019 $ Expenses: $ Total expenses $ Prepare a Statement of Owner's Equity (no additional investments were made during the year.) Recessive InteriorsStatement of Owner's Equity For the Year Ended January 31, 2019 $ $ $ Prepare a balance sheet. Recessive InteriorsBalance SheetJanuary 31, 2019 Assets Liabilities Current assets: Current liabilities: $ $ Total liabilities $ Total current assets $ Property, plant, and equipment: Owner's Equity $ $ $ Total property, plant, and equipment Total assets $ Total liabilities and owner's equity $ 6. Journalize the closing entries on page 27 of the journal. Then post to the general ledger in the attached spreadsheet. For a compound transaction, if an amount box does not require an entry, leave it blank. Journal PAGE 27 Date Account Post. Ref. Debit Credit Close expenses, revenues&income/loss Close drawing 7. Prepare a post-closing trial balance. If an amount box does not require an entry, leave it blank. Recessive InteriorsPost-Closing Trial BalanceJanuary 31, 2019 Debit Balances Credit Balances Totals Check My Work1 more Check My Work uses remaining.
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.
Ledger Accounts,
The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows:
| Recessive Interiors Unadjusted Trial Balance January 31, 2019 |
||||||
| Account No. | Debit Balances | Credit Balances | ||||
| Cash | 11 | 13,100 | ||||
| Supplies | 13 | 8,000 | ||||
| Prepaid Insurance | 14 | 7,500 | ||||
| Equipment | 16 | 113,000 | ||||
| 17 | 12,000 | |||||
| Trucks | 18 | 90,000 | ||||
| Accumulated Depreciation-Trucks | 19 | 27,100 | ||||
| Accounts Payable | 21 | 4,500 | ||||
| Jeanne McQuay, Capital | 31 | 126,400 | ||||
| Jeanne McQuay, Drawing | 32 | 3,000 | ||||
| Service Revenue | 41 | 155,000 | ||||
| Wages Expense | 51 | 72,000 | ||||
| Rent Expense | 52 | 7,600 | ||||
| Truck Expense | 53 | 5,350 | ||||
| Miscellaneous Expense | 59 | 5,450 | ||||
| 325,000 | 325,000 |
The following additional accounts from Recessive Interiors' chart of accounts should be used: Wages Payable, 22; Depreciation Expense-Equipment, 54; Supplies Expense, 55; Depreciation Expense-Trucks, 56; Insurance Expense, 57.
The data needed to determine year-end adjustments are as follows:
- Supplies on hand at January 31 are $2,850.
- Insurance premiums expired during the year are $3,150.
- Depreciation of equipment during the year is $5,250.
- Depreciation of trucks during the year is $4,000.
- Wages accrued but not paid at January 31 are $900.
Use the attached spreadsheet to complete parts 2, 3, and 6. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.
Required:
1. For each account listed in the trial balance, notice that the balance has been entered in the appropriate general ledger account balance column of the spreadsheet. Posting to the general ledger will take place in step 3 and step 6.
2. (Optional) In the attached spreadsheet, notice that the unadjusted trial balance amounts have been entered. Enter the adjusting entries and complete the worksheet.
3. Journalize the adjusting entries on page 26 of the journal. Then post to the appropriate accounts in the general ledger in the attached spreadsheet, inserting balances in the accounts affected.
| Journal | PAGE 26 | |||
|---|---|---|---|---|
| Date | Account | Post. Ref. | Debit | Credit |
| a. | ||||
| b. | ||||
| c. | ||||
| d. | ||||
| e. | ||||
4. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.
| Recessive Interiors Adjusted Trial Balance January 31, 2019 |
||
|---|---|---|
| Debit Balances | Credit Balances | |
5. Prepare an income statement.
| Recessive Interiors Income Statement For the Year Ended January 31, 2019 |
||
|---|---|---|
| $ | ||
| Expenses: | ||
| $ | ||
| Total expenses | ||
| $ |
Prepare a Statement of Owner's Equity (no additional investments were made during the year.)
| Recessive Interiors Statement of Owner's Equity For the Year Ended January 31, 2019 |
||
|---|---|---|
| $ | ||
| $ | ||
| $ |
Prepare a balance sheet.
| Recessive Interiors Balance Sheet January 31, 2019 |
||||||
|---|---|---|---|---|---|---|
| Assets | Liabilities | |||||
| Current assets: | Current liabilities: | |||||
| $ | $ | |||||
| Total liabilities | $ | |||||
| Total current assets | $ | |||||
| Property, plant, and equipment: | Owner's Equity | |||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| Total property, plant, and equipment | ||||||
| Total assets | $ | Total liabilities and owner's equity | $ |
6. Journalize the closing entries on page 27 of the journal. Then post to the general ledger in the attached spreadsheet. For a compound transaction, if an amount box does not require an entry, leave it blank.
| Journal | PAGE 27 | |||
|---|---|---|---|---|
| Date | Account | Post. Ref. | Debit | Credit |
| Close expenses, revenues &income/loss |
||||
| Close drawing | ||||
7. Prepare a post-closing trial balance. If an amount box does not require an entry, leave it blank.
| Recessive Interiors Post-Closing Trial Balance January 31, 2019 |
||
|---|---|---|
| Debit Balances | Credit Balances | |
| Totals |
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