Taylor Tailoring Trial Balance October 31, 20 -- ACCOUNT ACCOUNT TILE DEBIT BALANCE CREDIT BALANCE NO. 6 2 1 1 00 48 4 00 100 0 00 380 0 00 Cash 101 Accounts Receivable Tailoring Supplies Tailoring Equipment Accounts Payable Ann Taylor, Capital Ann Taylor, Drawing Tailoring Fees Wages Expense 122 141 183 4 125 00 6 130 00 202 311 312 800 00 401 360 0 00 80 0 00 3 4 00 6 0 0 00 | 6 0 00 4 4 00 2 2 00 13 85 5 00 511 Advertising Expense 512 521 Rent Expense Phone Expense 525 Electricity Expense Miscellaneous Expense 533 549 13 85 5 00
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.
JOURNALIZING AND POSTING TRANSACTIONS Ann Taylor owns a suit tailoring shop. She opened business in September. She rented a small work space and has an assistant to receive job orders and process claim
tickets. Her
Taylor's transactions for November are as follows:
Nov. 1 Paid rent, $300.
2 Purchased tailoring supplies on account, $150.
3 Purchased a new button hole machine on account, $300.
5 Earned first week's revenue, $400: $100 in cash and $300 on account.
8 Paid for newspaper advertising, $13.
9 Paid phone bill, $28.
10 Paid electric bill, $21.
11 Received cash on account from customers, $200.
12 Earned second week's revenue, $450: $200 in cash and $250 on
account.
15 Paid assistant, $400.
16 Made payment on account, $100.
17 Paid for magazine subscription (miscellaneous expense), $12.
19 Earned third week's revenue, $450: $300 in cash, $150 on account.
23 Received cash on account from customers, $300.
24 Paid for newspaper advertising, $13.
26 Paid for postage (miscellaneous expense), $12.
27 Earned fourth week's revenue, $600: $200 in cash and $400 on
account.
30 Received cash on account from customers, $400.
REQUIRED
1. Set up general ledger accounts by entering the balances as of
November 1, 20-.
2. Journalize the transactions for November in a two-column general journal. Use the following journal page numbers: November 1-11, page
7; November 12-24, page 8; November 26-30, page 9.
3.
4. Prepare a trial balance.
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