4) New lighting equipment was purchased on September 1, 20x2. Terms of purchase: Initial cash payment of $10,000; plus a 5-year non-interest bearing note for $90,000 was accepted by the supplier. An annual interest rate of 6% was considered appropriate in the circumstances. The new lighting equipment has an estimated life of 10 years; the estimated residual value is 20% of original cost. [The note payable is referred to as Note Payable "B".]
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.
![uipmcnt. lU DE SUlu and replaced (not being depreciated).
2) The existing lighting equipment (e.g., amount purchased on April 1, 20x1 plus amount
acquired on July 1, 20x2 with purchase of theater) was sold on July 1, 20x2. Terms of sale:
A 3-year, 2% note for $47,500 was accepted in exchange for the lighting equipment; the maturity
date of the note is July 1, 20x5. The appropriate annual interest rate in the circumstances was
determined to be 9%. [The note receivable is referred to as Note Receivable "2".]
3) A two-year fire insurance policy was purchased on July 1, 20x2 for $6,720.
4) New lighting equipment was purchased on September 1, 20x2. Terms of purchase: Initial
cash payment of $10,000; plus a 5-year non-interest bearing note for $90,000 was accepted by
the supplier. An annual interest rate of 6% was considered appropriate in the circumstances.
The new lighting equipment has an estimated life of 10 years; the estimated residual value is 20%
of original cost. [The note payable is referred to as Note Payable "B".]
5) New sound equipment was purchased for $18,000 cash on September 1, 20x2. The estimated
life is ten years with no estimated residual value.
6) Dividends of $.20 per share were declared and paid on December 15, 20x2.
7) A mortgage payment was made on December 31, 20x2 for the period July 1, 20x2 through
December 31, 20x2 for $10,175. $1,775 was applied to the principal (e.g., mortgage payable account](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93e9e2bf-8eb8-47fc-882b-eb3d958ece08%2F0a3adf28-1c9c-4d65-a846-c471ab21d698%2F7erbug_processed.jpeg&w=3840&q=75)
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