Accounts payable $281,700 Prepaid insurance $6,800 Property and equipment 672,500 Contributed capital 380,600 Cost of service expense 183,600 Other revenue 114,100 Supplies inventory 216,900 Deferred revenue 83,600 Service revenue 904,000 Depreciation expense 57,750 Bonds payable 229,600 Accounts receivable 607,550 Interest receivable 4,300 Rent expense 30,500 Retained earnings 187,400 Cash 351,340 Notes payable 356,040 Accrued liabilities 23,400 Investments 146,400 Prepaid rent 11,200 Accumulated depreciation 128,900 Administrative and general expense (includes interest, utilities, etc.) 64,300 Supplies expense 336,200 Income tax payable 0 Based on the following data for Checkmate Company, prepare a Statement of Retained Earnings and demonstrate that the accounting equation remains in balance after the retained earnings account has been updated. (Assume that the company pays no dividends.) These amounts reflect balances at the end of 2020, after adjustments, but before the calculation of income tax expense.
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.
|
Accounts payable |
$281,700 |
Prepaid insurance |
$6,800 |
|
Property and equipment |
672,500 |
Contributed capital |
380,600 |
|
Cost of service expense |
183,600 |
Other revenue |
114,100 |
|
Supplies inventory |
216,900 |
Deferred revenue |
83,600 |
|
Service revenue |
904,000 |
|
57,750 |
|
Bonds payable |
229,600 |
|
607,550 |
|
Interest receivable |
4,300 |
Rent expense |
30,500 |
|
|
187,400 |
Cash |
351,340 |
|
Notes payable |
356,040 |
Accrued liabilities |
23,400 |
|
Investments |
146,400 |
Prepaid rent |
11,200 |
|
|
128,900 |
Administrative and general expense (includes interest, utilities, etc.) |
64,300 |
|
Supplies expense |
336,200 |
Income tax payable |
0 |
Based on the following data for Checkmate Company, prepare a Statement of Retained Earnings and demonstrate that the
These amounts reflect balances at the end of 2020, after adjustments, but before the calculation of income tax expense.
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