The adjusted trial balance for Chiara Company as of December 31 follows. Cash Accounts receivable Interest receivable. Notes receivable (due in 90 days). Office supplies Automobiles Accumulated depreciation-Automobiles Equipment Accumulated depreciation-Equipment Land Land Accounts payable Interest payable Salaries payable Unearned revenue Long-term notes payable Common stock Retained earnings Dividends Services revenue Interest revenue Depreciation expense-Automobiles Depreciation expense-Equipment salaries expense ages expense interest expense ffice supplies expense Debit $ 118,100 54,000 22,800 169,000 15,500 170,000 140,000 77,000 52,000 27,000 19,000 183,000 41,000 34,000 35,200 61,000 Credit $ 100,000 21,000 95,000 35,000 15,000 36,000 148,000 29,580 266,220 474,000 28,000
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.
![The adjusted trial balance for Chiara Company as of December 31 follows.
Cash
Accounts receivable
Interest receivable
Notes receivable (due in 90 days)
Office supplies
Automobiles
Accumulated depreciation-Automobiles
COME
Equipment
equip
Accumulated depreciation-Equipment
AULI
P
Land
Accounts payable
Decou
Interest payable
CHERA
Salaries payable
TUTOR
Unearned revenue
Long-term notes payable
commo
Common stock
Retained earnings
Dividends
Services revenue
Interest revenue
Depreciation expense-Automobiles
Depreciation expense-Equipment
Salaries expense
Wages expense
Interest expense
Office supplies expense
Advertising expense
Repairs expense-Automobiles
Totals
Debit
$ 118,100
54,000
22,800
169,000
15,500
170,000
140,000
77,000
52,000
27,000
19,000
183,000
41,000
34,000
35,200
61,000
29,200
$1,247,800
Credit
$ 100,000
21,000
95,000
35,000
15,000
36,000
148,000
29,580
266,220
474,000
28,000
$ 1,247,800
Required:
Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the
statement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was
$266,220]; and (c) the balance sheet as of December 31.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F621663c7-0fe0-4c1b-bfdb-6a6ea60efc81%2F76a705dc-679f-425b-ac06-9df23b102ecf%2Fhf5udwn_processed.jpeg&w=3840&q=75)
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