The trial balances shown below are before and after adjustment for Crane Company at the end of its fiscal year. CRANE COMPANY Trial Balance August 31, 2017 Before Adjustment After Adjustment Dr. Cr. Dr. Cr. Cash $10,390 $10,390 Accounts Receivable 8,730 9,330 Supplies 2,840 850 Prepaid Insurance 4,360 3,060 Equipment 16,660 16,660 Accumulated Depreciation—Equipment $3,749 $4,949 Accounts Payable 5,480 5,480 Salaries and Wages Payable 0 1,870 Unearned Rent Revenue 1,800 1,010 Common Stock 16,100 16,100 Retained Earnings 5,010 5,010 Dividends 2,680 2,680 Service Revenue 34,000 34,600 Rent Revenue 12,740 13,530 Salaries and Wages Expense 16,630 18,500 Supplies Expense 0 1,990 Rent Expense 16,589 16,589 Insurance Expense 0 1,300 Depreciation Expense 0 1,200 $78,879 $78,879 $82,549 $82,549 Prepare the adjusting entries that were made. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 31 enter an account title to record the service revenue enter a debit amount enter a credit amount enter an account title to record the service revenue enter a debit amount enter a credit amount (To record the service revenue) Aug. 31 enter an account title to record the supplies expense enter a debit amount enter a credit amount enter an account title to record the supplies expense enter a debit amount enter a credit amount (To record the supplies expense) Aug. 31 enter an account title to record the insurance expense enter a debit amount enter a credit amount enter an account title to record the insurance expense enter a debit amount enter a credit amount (To record the insurance expense) Aug. 31 enter an account title to record the depreciation expense enter a debit amount enter a credit amount enter an account title to record the depreciation expense enter a debit amount enter a credit amount (To record depreciation expense) Aug. 31 enter an account title to record salaries and wages expense enter a debit amount enter a credit amount enter an account title to record salaries and wages expense enter a debit amount enter a credit amount (To record salaries and wages expense) Aug. 31 enter an account title to record the rent revenue enter a debit amount enter a credit amount enter an account title to record the rent revenue enter a debit amount enter a credit amount (To record rent revenue)
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
| CRANE COMPANY Trial Balance August 31, 2017 |
||||||||
|---|---|---|---|---|---|---|---|---|
|
Before
Adjustment |
After
Adjustment |
|||||||
| Dr. | Cr. | Dr. | Cr. | |||||
| Cash | $10,390 | $10,390 | ||||||
| 8,730 | 9,330 | |||||||
| Supplies | 2,840 | 850 | ||||||
| Prepaid Insurance | 4,360 | 3,060 | ||||||
| Equipment | 16,660 | 16,660 | ||||||
| $3,749 | $4,949 | |||||||
| Accounts Payable | 5,480 | 5,480 | ||||||
| Salaries and Wages Payable | 0 | 1,870 | ||||||
| Unearned Rent Revenue | 1,800 | 1,010 | ||||||
| Common Stock | 16,100 | 16,100 | ||||||
| 5,010 | 5,010 | |||||||
| Dividends | 2,680 | 2,680 | ||||||
| Service Revenue | 34,000 | 34,600 | ||||||
| Rent Revenue | 12,740 | 13,530 | ||||||
| Salaries and Wages Expense | 16,630 | 18,500 | ||||||
| Supplies Expense | 0 | 1,990 | ||||||
| Rent Expense | 16,589 | 16,589 | ||||||
| Insurance Expense | 0 | 1,300 | ||||||
| Depreciation Expense |
0
|
1,200
|
||||||
|
$78,879
|
$78,879
|
$82,549
|
$82,549
|
Prepare the
|
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
|---|---|---|---|
| Aug. 31 |
enter an account title to record the service revenue
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record the service revenue
|
enter a debit amount
|
enter a credit amount
|
|
| (To record the service revenue) | |||
| Aug. 31 |
enter an account title to record the supplies expense
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record the supplies expense
|
enter a debit amount
|
enter a credit amount
|
|
| (To record the supplies expense) | |||
| Aug. 31 |
enter an account title to record the insurance expense
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record the insurance expense
|
enter a debit amount
|
enter a credit amount
|
|
| (To record the insurance expense) | |||
| Aug. 31 |
enter an account title to record the depreciation expense
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record the depreciation expense
|
enter a debit amount
|
enter a credit amount
|
|
| (To record depreciation expense) | |||
| Aug. 31 |
enter an account title to record salaries and wages expense
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record salaries and wages expense
|
enter a debit amount
|
enter a credit amount
|
|
| (To record salaries and wages expense) | |||
| Aug. 31 |
enter an account title to record the rent revenue
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title to record the rent revenue
|
enter a debit amount
|
enter a credit amount
|
|
| (To record rent revenue) |
Required adjusting entries are given below:
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