a.-b. Merchandise Inventory, before adjustment, has a balance of $7,000. The newly counted inventory balance is $7,500. c. Unearned Seminar Fees has a balance of $5,500, representing prepayment by customers for five seminars to be conducted in June, July, and August 20X1. Two seminars had been conducted by June 30, 20X1. d. Prepaid Insurance has a balance of $9,000 for six months' insurance paid in advance on May 1, 20X1. e. Store equipment costing $13,650 was purchased on March 31, 20X1. It has a salvage value of $450 and a useful life of five years. f. Employees have earned $200 that has not been paid at June 30, 20X1. g. The employer owes the following taxes on wages not paid at June 30, 20X1: SUTA, $6.00; FUTA, $1.20; Medicare, $2.90; and social security, $12.40. h. Management estimates uncollectible accounts expense at 1 percent of sales. This year's sales were $1,500,000. i. Prepaid Rent has a balance of $5,850 for six months' rent paid in advance on March 1, 20X1. j. The Supplies account in the general ledger has a balance of $350. A count of supplies on hand at June 30, 20X1, indicated $125 of supplies remain. k. The company borrowed $19,200 from Second Bancorp on June 1, 20X1, and issued a four-month note. The note bears interest at 9 percent. Required: Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 20X1. The company has a June 30 fiscal year-end. Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
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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