Required information (The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollect ible Accounts Inventory Debit $ 26,300 48,600 Credit $ 5,400 21,200 58,000 21,000 Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings 2,700 29,700 62,000 47,000 28,300 $175, 100 $175,100 Totals During January 2021, the following transactions occur: January 2 Sold gift cards totaling $10,400. The cards are redeemable for merchandise within one year of the purchase date. January 6 Purchase addit ional inventory on account, $159,000. January 15 Firework sales for the first half of the month total $147,000. ALl of these sales are on account. The cost of the units sold is $79,800. January 23 Receive $126,600 from customers on accounts receivable. January 25 Pay $102,000 to inventory suppliers on accounts payable. January 28 Write off accounts receivable as uncollectible, $6,000. January 30 Firework sales for the second half of the month total $155, 000. Sales include $11,000 for cash and $144,000 on account. The cost of the units sold is s85, 500. January 31 Pay cash for monthly salaries, $53,200. 3. Prepare an adjusted trial balance as of January 31, 2021. ACME Fireworks Adjusted Trial Balance January 31, 2021 Accounts Debit Credit Cash Accounts Receivable 140,600 Inventory 21,200 Land 58,000 Equipment 21,000 Accumulated Depreciation 700 Accounts Payable Notes Payable 62,000 Common Stock 47,000 28,300 Retained Earnings Allowance for Uncollectible Accounts 10,400 Sales Revenue Cost of Goods Sold Bad Debt Expense Salaries Expense 53,200 Totals 240,800 %24 203,600
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.
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