Using the following unadjusted trial balance and the additional data, prepare the necessary adjusting journal entries for the month ended September 30, 2021. You may round to the nearest dolar. Jansen Co. Trial Balance September 30, 2021 Debit Credit Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable Unearned Revenue Davis Capital David Drawing Service Revenue Salaries Expense Utilities Expense $41,100 70,600 11,300 4,000 34,000 $20,000 8,800 48,000 97,200 14,000 40,000 39,000 $214,000 $214,000 Additional Data: a) The equipment was purchased on September 1. It has an estimated life of 10 years. b) Supplies on hand at September 30 total $2,100. c) The insurance policy was purchased on September 1. The policy is for 18 months. d) Jansen agreed to provide 3 weeks of service beginning on September 23, a fee of $1,200 will be collected on October 14 upon completion. e) September 30 is a Wednesday, salaries of $20,000 are paid every other Friday. Salaries were last paid on Friday September 25. f) The note was signed on September 1. The note has a 5% annual interest rate and a term of 6 months. g) The unearned revenue account balance represents fees collected in advance during September. As of September 30, one-quarter of the service has been provided.
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.
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