The trial balance of Gagne Company shown below does not balance GAGNE COMPANY Trial Balance June 30, 2008 Debit Credit Cash $2,600 Accounts receivable 7,600 Supplies 600 Equipment 8,300 Accounts Payable $9,766 Gagne, Capital 1,952 Gagne, Drawing 1,500 Service Revenue 15,200 Wage Expense 3,800 Repair Expense 1,600 __Total $26,000 $26,918 As examination of the ledger and journal reveals the following errors: Each of the above listed accounts has a normal balance per the general ledger Cash of $360 received from a customer on account was debited to Cash $630 and credited to Accounts Receivable $630 A withdrawal of $300 by the owner was posted as a credit to Gagne, Drawing, $300 and credited to Cash $30 A debit of $300 was not posted to Wages Expense The purchase of equipment on account for $700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for $700 Services werer performed on account for a customer, $510, for which Accounts Receivable was debited $510 and Service Revenue was credited $51 A payment on account for $225 was credited to Cash for $225 and credited to Accounts Payable for $252 Prepare a correct the Trial Balance (correct or adjust error )
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
GAGNE COMPANY
Trial Balance
June 30, 2008
Debit Credit
Cash $2,600
Supplies 600
Equipment 8,300
Accounts Payable $9,766
Gagne, Capital 1,952
Gagne, Drawing 1,500
Service Revenue 15,200
Wage Expense 3,800
Repair Expense 1,600
__Total $26,000 $26,918
As examination of the ledger and journal reveals the following errors:
- Each of the above listed accounts has a normal balance per the general ledger
- Cash of $360 received from a customer on account was debited to Cash $630 and credited to Accounts Receivable $630
- A withdrawal of $300 by the owner was posted as a credit to Gagne, Drawing, $300 and credited to Cash $30
- A debit of $300 was not posted to Wages Expense
- The purchase of equipment on account for $700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for $700
- Services werer performed on account for a customer, $510, for which Accounts Receivable was debited $510 and Service Revenue was credited $51
- A payment on account for $225 was credited to Cash for $225 and credited to Accounts Payable for $252
Prepare a correct the Trial Balance (correct or adjust error ).
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