The controller prepared the following pre-closing trial balance. LMN LLC Trial Balance Debit 112,000 27,000 24,000 3,300 38,000 12/31/20 Cash Accounts Receivable Prepaid Rent Inventory Office Equipment Accumulated Depreciation - Office Equipment Building Accumulated Depreciation - Building Land Accounts Payable Salaries Payable Interest Payable Note Payable - due 12/31/23 Common Stock Retained Earnings Dividends Sales Cost of goods sold Salaries Expense Rent Expense Depreciation Expense - Equipment Depreciation Expense - Building Credit 3,200 288,000 42,000 700,000 25,800 14,500 2,500 72,000 200,000 710,000 200,500 430,800 60,000 30,000 10,200 800 7,000 1,500,800 1,500,800 Using the attached T-account template (or a spreadsheet with the same level of account level detail) document each account, taking care to place the account under the proper balance sheet classification. Be sure to label the balances "B" for balances. Then prepare the closing entries, using an "income summary" account.
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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