The Blossom Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. BLOSSOM HOTELTrial BalanceMay 31, 2022 Debit Credit Cash $ 2,513 Supplies 2,600 Prepaid Insurance 1,800 Land 15,013 Buildings 67,600 Equipment 16,800 Accounts Payable $ 4,713 Unearned Rent Revenue 3,300 Mortgage Payable 33,600 Common Stock 60,013 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $110,626 $110,626 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,070 of unused supplies on May 31. 3. (a) Annual depreciation is $2,760 on the building. (b) Annual depreciation is $2,160 on equipment. 4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,620 has been earned. 6. Salaries of $720 are accrued and unpaid at May 31. A) Journalize the adjusting entries on May 31. B) Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. C) Prepare an adjusted trial balance on May 31. D) Prepare an income statement for the month of May. E) Prepare a retained earnings statement for the month of May. F) Prepare a classified balance sheet at May 31. G) Identify which accounts should be closed on May 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.
The Blossom Hotel opened for business on May 1, 2022. Here is its
| BLOSSOM HOTEL Trial Balance May 31, 2022 |
||||||
|---|---|---|---|---|---|---|
|
Debit
|
Credit
|
|||||
|
Cash
|
$ 2,513 | |||||
|
Supplies
|
2,600 | |||||
|
Prepaid Insurance
|
1,800 | |||||
|
Land
|
15,013 | |||||
|
Buildings
|
67,600 | |||||
|
Equipment
|
16,800 | |||||
|
Accounts Payable
|
$ 4,713 | |||||
|
Unearned Rent Revenue
|
3,300 | |||||
|
Mortgage Payable
|
33,600 | |||||
|
Common Stock
|
60,013 | |||||
|
Rent Revenue
|
9,000 | |||||
|
Salaries and Wages Expense
|
3,000 | |||||
|
Utilities Expense
|
800 | |||||
|
Advertising Expense
|
500
|
|
||||
|
$110,626
|
$110,626
|
Other data:
| 1. | Insurance expires at the rate of $450 per month. | |
| 2. | A count of supplies shows $1,070 of unused supplies on May 31. | |
| 3. | (a) Annual |
|
| (b) Annual depreciation is $2,160 on equipment. | ||
| 4. | The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) | |
| 5. | Unearned rent of $2,620 has been earned. | |
| 6. | Salaries of $720 are accrued and unpaid at May 31. |
A) Journalize the
B) Prepare a ledger using T-accounts. Enter the trial balance amounts and
C) Prepare an adjusted trial balance on May 31.
D) Prepare an income statement for the month of May.
E) Prepare a
F) Prepare a classified balance sheet at May 31.
G) Identify which accounts should be closed on May 31.
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