Unadjusted Trial Balance December 31, 2015 Debit Credit 1 Cash 50,000 2 Accounts receivable 0 3 Teaching supplies 60,000 4 Prepaid insurance 18,000 5 Prepaid rent 2,600 6 Professional library 10,000 7 Accumulated depreciation—Professional library 1,500 8 Equipment 30,000 9 Accumulated depreciation—Equipment 16,000 10 Accounts payable 12,200 11 Salaries payable 0 12 Unearned training fees 27,600 13 M. Alcorn, Capital 68,500 14 M. Alcorn, Withdrawals 20,000 15 Tuition fees earned 105,000 16 Training fees earned 62,000 17 Depreciation expense—Professional library 0 18 Depreciation expense—Equipment 0 19 Salaries expense 43,200 20 Insurance expense 0 21 Rent expense 28,600 22 Teaching supplies expense 0 23 Advertising expense 18,000 23 Utilities expense 12,400 Total 292800 292800 Following is the unadjusted trial balance for Alcorn Institute as of December 31, 2011, which initially records prepaid expenses and unearned revenues in balance sheet accounts. Additional Information Items a. An analysis of the Institute’s insurance policies shows that $6,400 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,500 are available at year-end 2015. c. Annual depreciation on the equipment is $4,000. d. Annual depreciation on the professional library is $2,000. e. On November 1, the Institute agreed to do a special four-month course (starting immediately) for a client. The contract calls for a $4,600 monthly fee, and the client paid the first two months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited. The last two month’s fees will be recorded when collected in 2016. f. On October 15, the Institute agreed to teach a four-month class (beginning immediately) to an individual for $2,200 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (Alcorn’s accruals are applied to the nearest half month;for example, October recognizes one-half month accrual.) g. The Institute’s only employee is paid weekly. As of the end of the year, three days’ salaries have accrued at the rate of $180 per day. h. The balance in the Prepaid Rent account represents rent for December Required: 1) Prepare the necessary adjusting journal entries for items a through h. 2) Prepare an adjusted trial balance.
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.
5 Unadjusted
Debit Credit
1 Cash 50,000
2
3 Teaching supplies 60,000
4 Prepaid insurance 18,000
5 Prepaid rent 2,600
6 Professional library 10,000
7
8 Equipment 30,000
9 Accumulated depreciation—Equipment 16,000
10 Accounts payable 12,200
11 Salaries payable 0
12 Unearned training fees 27,600
13 M. Alcorn, Capital 68,500
14 M. Alcorn, Withdrawals 20,000
15 Tuition fees earned 105,000
16 Training fees earned 62,000
17 Depreciation expense—Professional library 0
18 Depreciation expense—Equipment 0
19 Salaries expense 43,200
20 Insurance expense 0
21 Rent expense 28,600
22 Teaching supplies expense 0
23 Advertising expense 18,000
23 Utilities expense 12,400
Total 292800 292800
Following is the unadjusted trial balance for Alcorn Institute as of December 31, 2011, which initially records prepaid expenses and unearned revenues in balance sheet accounts.
Additional Information Items
a. An analysis of the Institute’s insurance policies shows that $6,400 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,500 are available at year-end 2015.
c. Annual depreciation on the equipment is $4,000.
d. Annual depreciation on the professional library is $2,000.
e. On November 1, the Institute agreed to do a special four-month course (starting immediately) for a client. The contract calls for a $4,600 monthly fee, and the client paid the first two months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited. The last two month’s fees will be recorded when collected in 2016.
f. On October 15, the Institute agreed to teach a four-month class (beginning immediately) to an individual for $2,200 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (Alcorn’s accruals are applied to the nearest half month;for example, October recognizes one-half month accrual.)
g. The Institute’s only employee is paid weekly. As of the end of the year, three days’ salaries have accrued at the rate of $180 per day.
h. The balance in the Prepaid Rent account represents rent for December
Required:
1) Prepare the necessary
2) Prepare an adjusted trial balance.
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