G The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2019 3 Adjusted Trial Balance 4 6 Account Title Cr. Dr. 8 Cash 9 Accounts Receivable 10 Supplies 11 Prepaid Insurance 11,000 28,150 6,350 9,500 75,000 250,000 12 Land 13 Buildings 14 Accumulated Depreciation–Buildings 15 Equipment 16 Accumulated Depreciation–Equipment 17 Accounts Payable 18 Salaries Payable 117,200 240,000 151,700 33,300 3,300 1,500 220,000 19 Unearned Rent 20 Nicole Gorman, Capital 21 Nicole Gorman, Drawing 22 Service Fees 23 Rent Revenue 24 Salaries Expense 25 Depreciation Expense–Equipment 26 Rent Expense 27 Supplies Expense 28 Utilities Expense 29 Depreciation Expense–Buildings 30 Repairs Expense 31 Insurance Expense 32 Miscellaneous Expense 20,000 468,000 5,000 291,000 17,500 15,500 9,000 8,500 6,600 3,450 3,000 5,450 1,000,000 33 1,000,000 (Continued)
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.
The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2019, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:
Instructions
1. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.
2.
3. If the balance of Nicole Gorman, Capital had instead increased $115,000 after the closing entries were posted and the withdrawals remained the same, what would have been the amount of net income or net loss?
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