1.
Journal:
Journal is the book of original entry. Journal consists of the day-to-day financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
T-Accounts:
T-accounts are referred as T-account because its format represents the letter “T”. The T-accounts consists of the following:
- The title of accounts.
- The debit side (Dr) and,
- The credit side (Cr).
Adjusted
The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting
An adjusting entry is prepared when the trial balance is not up-to-date, and complete, and they are usually prepared at the end of the accounting period. This adjusting entry is essential for preparing the financial statements of the business.
Spreadsheet:
A spreadsheet is a worksheet. It is used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.
Statement of owners’ equity:
This statement reports the beginning owner’s equity and all the changes, which led to ending owners’ equity. Additional capital, net income from income statement is added to and drawing is deducted from beginning owner’s equity to arrive at the end result, ending owner’s equity.
Income statement:
An income statement is one of the financial statements which shows the revenues, and expenses of the company. The income statement is prepared to ascertain the net income/loss of the company, by deducting the expenses from the revenues.
Balance sheet:
A balance sheet is a financial statement consists of the assets, liabilities, and the
Closing entries:
Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.
Post-Closing Trial Balance:
After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.
To prepare: The T-accounts.
2.
To enter: The unadjusted trial balance on an end-of-period spreadsheet, and complete the spreadsheet.
3.
To Journalize and
4.
To prepare: An unadjusted trial balance for Laundry LM, as of August 31, 2018.
5.
The net income or net loss of Laundry LMfor the month of August.
6.
To Journalize: The closing entries for LM Laundry.
7.
To prepare: The post–closing trial balance of LM Laundryfor the month ended August 31, 2018.
Trending nowThis is a popular solution!
Chapter 4 Solutions
Financial & Managerial Accounting
- Prepare journal entries to record the following transactions. Create a T-account for Unearned Revenue, post any entries that affect the account, tally ending balance for the account (assume Unearned Revenue beginning balance of $12,500). A. May 1, collected an advance payment from client, $15,000 B. December 31, remaining unearned advances, $7,500arrow_forwardPrepare journal entries to record the following transactions. Create a T-account for Accounts Payable, post any entries that affect the account, and tally ending balance for the account. Assume an Accounts Payable beginning balance of $5,000. A. February 2, purchased an asset, merchandise inventory, on account, $30,000 B. March 10, paid creditor for part of February purchase, $12,000arrow_forwardPrepare journal entries to record the following business transaction and related adjusting entry. A. January 12, purchased supplies for cash, to be used all year, $3,850 B. December 31, physical count of remaining supplies, $800arrow_forward
- T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Epicenter Laundry at June 30, 20Y6, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: (a) Laundry supplies on hand at June 30 are 8,600. (b) Insurance premiums expired during the year are 5,700. (c) Depreciation of laundry equipment during the year is 6,500. (d) Wages accrued but not paid at June 30 are 1,100. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as June 30 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended June 30, 20Y6, additional common stock of 7,500 was issued. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forwardThe unadjusted trial balance of PS Music as of July 31, 2018, along with the adjustment data for the two months ended July 31, 2018, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared: PS Music Adjusted Trial Balance July 31, 2018 Account No. Debit Balances Credit Balances Cash................................................. 11 9,945 Accounts Receivable................................... 12 4,150 Supplies.............................................. 14 275 Prepaid Insurance..................................... 15 2,475 Office Equipment..................................... 17 7,500 Accumulated DepreciationOffice Equipment.......... 18 50 Accounts Payable..................................... 21 8,350 Wages Payable........................................ 22 140 Unearned Revenue.................................... 23 3,600 Common Stock....................................... 31 9,000 Dividends............................................ 33 1,750 Fees Earned........................................... 41 21,200 Music Expense........................................ 54 3,610 Wages Expense....................................... 50 2,940 Office Rent Expense................................... 51 2,550 Advertising Expense................................... 55 1,500 Equipment Rent Expense.............................. 52 1,375 Utilities Expense...................................... 53 1,215 Supplies Expense...................................... 56 925 Insurance Expense.................................... 57 225 Depreciation Expense................................. 58 50 Miscellaneous Expense................................ 59 1,855 42,340 42,340 Instructions 1. (Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet. 2. Prepare an income statement, a retained earnings statement, and a balance sheet. 3. Journalize and post the closing entries. The retained earnings account is #33 and the income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 4. Prepare a post-dosing trial balance.arrow_forwardPOSTING ADJUSTING ENTRIES Two adjusting entries are in the following general journal. Post these adjusting entries to the four general ledger accounts. The following account numbers were taken from the chart of accounts: 141, Supplies; 219, Wages Payable; 511, Wages Expense; and 523, Supplies Expense. If you are not using the working papers that accompany this text, enter the following balances before posting the entries: Supplies, 200 Debit; and Wages Expense, 1,200 Debit.arrow_forward
- T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: (a) Wages accrued but not paid at August 31 are 2,200. (b) Depreciation of equipment during the year is 8,150. (c) Laundry supplies on hand at August 31 are 2,000. (d) Insurance premiums expired during the year are 5,300. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as Aug. 31 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended August 31, 20Y5, common stock of 3,000 was issued. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forwardFor each of the following accounts, identify whether it would be closed at year-end (yes or no) and on which financial statement the account would be reported (Balance Sheet, Income Statement, or Retained Earnings Statement). A. Accounts Payable B. Accounts Receivable C. Cash D. Dividends E. Fees Earned Revenue F. Insurance Expense G. Prepaid Insurance H. Suppliesarrow_forwardWhich transaction would require adjustment at December 31? a. The sale of merchandise for cash on December 30. b. Common stock was issued on November 30. c. Salaries were paid to employees on December 31 for work performed in December. d. A I-year insurance policy (which took effect immediately) was purchased on December 1.arrow_forward
- TRIAL BALANCE The following accounts have normal balances. Prepare a trial balance for Bettys Cleaning Service as of September 30, 20--.arrow_forwardExercise 2-53 Preparing a Trial Balance Preparation The fo1lowing accounts and account balances are available for Badger Auto Parts at December 31, 2019: Required: Prepare a trial balance. Assume that all accounts have normal balances.arrow_forwardADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry. Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis. (a)Wages paid during 20-1 are 20,080. (b)Wages earned but not paid (accrued) as of December 31, 20-1, are 280. (c)On January 3, 20-2, payroll of 840 is paid, which includes the 280 of wages earned but not paid in December.arrow_forward
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning