The Sky Blue Corporation has the following adjusted trial balance at December 31.Debit CreditCash $ 1,310Accounts Receivable 2,800Prepaid Insurance 3,100Notes Receivable (long-term) 3,800Equipment 16,000Accumulated Depreciation $ 4,200Accounts Payable 6,220Salaries and Wages Payable 1,400Income Taxes Payable 3,700Deferred Revenue 760Common Stock 3,200Retained Earnings 1,320Dividends 380Sales Revenue 49,230Rent Revenue 380Salaries and Wages Expense 23,200Depreciation Expense 2,100Utilities Expense 5,020Insurance Expense 2,200Rent Expense 6,800Income Tax Expense 3,700Total $ 70,410 $ 70,410How would you make the adjusted trial balance sheet
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 Sky Blue Corporation has the following adjusted
Debit Credit
Cash $ 1,310
Accounts Receivable 2,800
Prepaid Insurance 3,100
Notes Receivable (long-term) 3,800
Equipment 16,000
Accumulated
Accounts Payable 6,220
Salaries and Wages Payable 1,400
Income Taxes Payable 3,700
Deferred Revenue 760
Common Stock 3,200
Retained Earnings 1,320
Dividends 380
Sales Revenue 49,230
Rent Revenue 380
Salaries and Wages Expense 23,200
Depreciation Expense 2,100
Utilities Expense 5,020
Insurance Expense 2,200
Rent Expense 6,800
Income Tax Expense 3,700
Total $ 70,410 $ 70,410
How would you make the adjusted trial balance sheet
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