The Sheffield Corp. is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2022, the following accounts appeared in two of its trial balances. All accounts balances are normal. Journalize the closing entries that are necessary. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Unadjusted Adjusted Unadjusted Adjusted Accounts Payable $25,600 $25,600 Inventory $29,500 $29,500 Accounts Receivable 31,000 31,000 Notes payable 35,000 35,000 Accumulated Depr.—Equipment 36,000 44,500 Prepaid Insurance 10,700 2,600 Cash 26,000 26,000 Property Tax Expense 2,500 Common Stock 42,400 42,400 Property Taxes Payable 2,500 Cost of Goods Sold 511,000 511,000 Rent Expense 14,400 14,400 Dividends 9,500 9,500 Retained Earnings 61,700 61,700 Freight-Out 5,900 5,900 Salaries and Wages Expense 95,500 95,500 Equipment 147,000 147,000 Sales Commissions Expense 6,500 11,000 Depreciation Expense 8,500 Sales Commissions Payable 4,500 Insurance Expense 8,100 Sales Returns and Allowances 7,500 7,500 Interest Expense 6,000 6,000 Sales Revenue 700,000 700,000 Interest Revenue 8,500 8,500 Utilities Expense 8,700 8,700
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 Sheffield Corp. is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2022, the following accounts appeared in two of its
Journalize the closing entries that are necessary. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Unadjusted
|
Adjusted
|
Unadjusted
|
Adjusted
|
|||||||
|---|---|---|---|---|---|---|---|---|---|---|
|
Accounts Payable
|
$25,600 | $25,600 |
Inventory
|
$29,500 | $29,500 | |||||
|
|
31,000 | 31,000 |
Notes payable
|
35,000 | 35,000 | |||||
|
Accumulated Depr.—Equipment
|
36,000 | 44,500 |
Prepaid Insurance
|
10,700 | 2,600 | |||||
|
Cash
|
26,000 | 26,000 |
Property Tax Expense
|
2,500 | ||||||
|
Common Stock
|
42,400 | 42,400 |
Property Taxes Payable
|
2,500 | ||||||
|
Cost of Goods Sold
|
511,000 | 511,000 |
Rent Expense
|
14,400 | 14,400 | |||||
|
Dividends
|
9,500 | 9,500 |
|
61,700 | 61,700 | |||||
|
Freight-Out
|
5,900 | 5,900 |
Salaries and Wages Expense
|
95,500 | 95,500 | |||||
|
Equipment
|
147,000 | 147,000 |
Sales Commissions Expense
|
6,500 | 11,000 | |||||
|
|
8,500 |
Sales Commissions Payable
|
4,500 | |||||||
|
Insurance Expense
|
8,100 |
Sales Returns and Allowances
|
7,500 | 7,500 | ||||||
|
Interest Expense
|
6,000 | 6,000 |
Sales Revenue
|
700,000 | 700,000 | |||||
|
Interest Revenue
|
8,500 | 8,500 |
Utilities Expense
|
8,700 | 8,700 |
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