A trial balance and additional information for adjustments appear below for RACAL Auto Repair Shop after one year of operation: MMB AUTO REPAIR SHOP TRIAL BALANCE 12/31/16 Debit Credit 25,000 45,000 Cash on Hand Cash in Bank Accounts Receivable 49,000 Notes Receivable 30,000 Prepaid Insurance Machinery & Equipment Furniture & Fixtures 15,000 150,000 25,000 26,000 Accounts Payable Notes Payable Michael, Capital 50,000 132,850 Michael, Personal 5,000 275,000 Repair Income Referral Income 15,000 45,000 Salaries Expense Supplies Expense Rent Expense 600 55,000 250ה Taxes & Licenses Expense Utilities Expense 46,750 Interest Expense 250 Totals 498,850.00 498,850.00 additional information: a. 10% of the accounts receivable should be recognized as doubtful of collection. b. Insurance premium recorded as Prepaid Insurance was for 6 months starting Sept. 1, 2016. c. Supplies still on hand, P200. d. The note receivable represents a 60-day 12% note received from the customer on Nov. 16, 2016. e. Machinery and equipment were acquired April 1, 2016 with an estimated useful life of 10 years and a scrap value of PS0,000. f. The notes payable is for 60 days at 18% due to Republic Finance dated December 1, 2016. 8. The furnitures and fixtures were acquired January 1, 2016 with an estimated useful life of 10 years and a scrap value of P2,500. REQUIRED: a. Prepare a 10-column worksheet as at December 31. b. Journalize your adjustments. c. Prepare an adjusted trial balance.
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.
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