Vedula Advertising was founded by Murali Vedula in January 2015. The following are both the adjusted and unadjusted trial balances as of December 31, 2020. Vedula AdvertisingTrial BalanceDecember 31, 2020 Unadjusted Adjusted Dr. Cr. Dr. Cr. Cash $ 11,000 $ 11,000 Accounts Receivable 16,000 19,500 Supplies 9,400 6,500 Prepaid Insurance 3,350 1,790 Equipment 60,000 60,000 Accumulated Depreciation—Equipment $ 25,000 $ 30,000 Notes Payable 8,000 8,000 Accounts Payable 2,000 2,000 Interest Payable 0 560 Unearned Service Revenue 5,000 3,100 Salaries and Wages Payable 0 820 Common Stock 20,000 20,000 Retained Earnings 5,500 5,500 Dividends 10,000 10,000 Service Revenue 57,600 63,000 Salaries and Wages Expense 9,000 9,820 Insurance Expense 1,560 Interest Expense 560 Depreciation Expense 5,000 Supplies Expense 2,900 Rent Expense 4,350 000,000 4,350 000,000 $123,100 $123,100 $132,980 $132,980 Instructions a. Journalize the annual adjusting entries that were made. b. Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31. c. Identify which accounts should be closed on December 31. d. If the note has been outstanding 10 months, what is the annual interest rate on that note? e. If the company paid $10,500 in salaries and wages in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019?
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.
Vedula Advertising was founded by Murali Vedula in January 2015. The following are both the adjusted and unadjusted
| Vedula Advertising Trial Balance December 31, 2020 |
||||||||
| Unadjusted | Adjusted | |||||||
| Dr. | Cr. | Dr. | Cr. | |||||
| Cash | $ 11,000 | $ 11,000 | ||||||
| Accounts Receivable | 16,000 | 19,500 | ||||||
| Supplies | 9,400 | 6,500 | ||||||
| Prepaid Insurance | 3,350 | 1,790 | ||||||
| Equipment | 60,000 | 60,000 | ||||||
| $ 25,000 | $ 30,000 | |||||||
| Notes Payable | 8,000 | 8,000 | ||||||
| Accounts Payable | 2,000 | 2,000 | ||||||
| Interest Payable | 0 | 560 | ||||||
| Unearned Service Revenue | 5,000 | 3,100 | ||||||
| Salaries and Wages Payable | 0 | 820 | ||||||
| Common Stock | 20,000 | 20,000 | ||||||
| 5,500 | 5,500 | |||||||
| Dividends | 10,000 | 10,000 | ||||||
| Service Revenue | 57,600 | 63,000 | ||||||
| Salaries and Wages Expense | 9,000 | 9,820 | ||||||
| Insurance Expense | 1,560 | |||||||
| Interest Expense | 560 | |||||||
| Depreciation Expense | 5,000 | |||||||
| Supplies Expense | 2,900 | |||||||
| Rent Expense | 4,350 | 000,000 | 4,350 | 000,000 | ||||
| $123,100 | $123,100 | $132,980 | $132,980 |
Instructions
a. Journalize the annual
b. Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31.
c. Identify which accounts should be closed on December 31.
d. If the note has been outstanding 10 months, what is the annual interest rate on that note?
e. If the company paid $10,500 in salaries and wages in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019?
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if the note has been outstanding 10 months, what is the annual interest rate on that note?
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