Use the following information for the Exercises below. [The following information applies to the questions displayed below.] The following is the adjusted year-end trial balance at December 31, 2018, of Wilson Trucking Company. Account Title Debit Credit Cash $ 7,400 Accounts receivable 17,000 Office supplies 3,800 Trucks 176,000 Accumulated depreciation—Trucks $ 35,000 Land 76,900 Accounts payable 12,700 Interest payable 4,700 Long-term notes payable 48,000 Common stock 21,100 Retained earnings, December 31, 2017 154,000 Dividends 19,800 Trucking fees earned 133,000 Depreciation expense—Trucks 22,500 Salaries expense 64,000 Office supplies expense 8,500 Repairs expense—Trucks 12,600 Totals $ 408,500 $ 408,500 Exercise 3-8 Preparing financial statements LO P3 (1) Prepare the income statement for the year ended December 31, 2018. (2) Prepare the statement of retained earnings for the year ended December 31, 2018. (3) Prepare its balance sheet as of December 31, 2018.
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.
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.]
The following is the adjusted year-end
| Account Title | Debit | Credit | ||||
| Cash | $ | 7,400 | ||||
| Accounts receivable | 17,000 | |||||
| Office supplies | 3,800 | |||||
| Trucks | 176,000 | |||||
| $ | 35,000 | |||||
| Land | 76,900 | |||||
| Accounts payable | 12,700 | |||||
| Interest payable | 4,700 | |||||
| Long-term notes payable | 48,000 | |||||
| Common stock | 21,100 | |||||
| 154,000 | ||||||
| Dividends | 19,800 | |||||
| Trucking fees earned | 133,000 | |||||
| Depreciation expense—Trucks | 22,500 | |||||
| Salaries expense | 64,000 | |||||
| Office supplies expense | 8,500 | |||||
| Repairs expense—Trucks | 12,600 | |||||
| Totals | $ | 408,500 | $ | 408,500 | ||
Exercise 3-8 Preparing financial statements LO P3
(2) Prepare the statement of retained earnings for the year ended December 31, 2018.
(3) Prepare its balance sheet as of December 31, 2018.
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