Adjusting Entries and Adjusted Trial Balances Emerson Company is a small editorial services company owned and operated by Suzanne Emerson. On October 31, 20Y6, Emerson Company's accounting clerk prepared the following unadjusted trial balance: Emerson Company Unadjusted Trial Balance October 31, 20Y6 Debit Balances Credit Balances Cash 5,220 Accounts Receivable 47,340 Prepaid Insurance 8,830 Supplies 2,410 Land 139,220 Building 331,140 Accumulated Depreciation—Building 170,120 Equipment 167,310 Accumulated Depreciation—Equipment 121,170 Accounts Payable 14,850 Unearned Rent 8,430 Suzanne Emerson, Capital 352,800 Suzanne Emerson, Drawing 18,460 Fees Earned 401,220 Salaries and Wages Expense 239,130 Utilities Expense 52,560 Advertising Expense 28,090 Repairs Expense 21,260 Miscellaneous Expense 7,620 1,068,590 1,068,590 The data needed to determine year-end adjustments are as follows: Unexpired insurance at October 31, $5,920. Supplies on hand at October 31, $720. Depreciation of building for the year, $3,910. Depreciation of equipment for the year, $3,390. Unearned rent at October 31, $2,190. Accrued salaries and wages at October 31, $3,830. Fees earned but unbilled on October 31, $22,470. Required: 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. If an amount box does not require an entry, leave it blank. 2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.
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.
Emerson Company is a small editorial services company owned and operated by Suzanne Emerson. On October 31, 20Y6, Emerson Company's accounting clerk prepared the following unadjusted
| Emerson Company | ||||
| Unadjusted Trial Balance | ||||
| October 31, 20Y6 | ||||
| Debit Balances |
Credit Balances |
|||
| Cash | 5,220 | |||
| 47,340 | ||||
| Prepaid Insurance | 8,830 | |||
| Supplies | 2,410 | |||
| Land | 139,220 | |||
| Building | 331,140 | |||
| 170,120 | ||||
| Equipment | 167,310 | |||
| Accumulated Depreciation—Equipment | 121,170 | |||
| Accounts Payable | 14,850 | |||
| Unearned Rent | 8,430 | |||
| Suzanne Emerson, Capital | 352,800 | |||
| Suzanne Emerson, Drawing | 18,460 | |||
| Fees Earned | 401,220 | |||
| Salaries and Wages Expense | 239,130 | |||
| Utilities Expense | 52,560 | |||
| Advertising Expense | 28,090 | |||
| Repairs Expense | 21,260 | |||
| Miscellaneous Expense | 7,620 | |||
| 1,068,590 | 1,068,590 |
The data needed to determine year-end adjustments are as follows:
- Unexpired insurance at October 31, $5,920.
- Supplies on hand at October 31, $720.
- Depreciation of building for the year, $3,910.
- Depreciation of equipment for the year, $3,390.
- Unearned rent at October 31, $2,190.
- Accrued salaries and wages at October 31, $3,830.
- Fees earned but unbilled on October 31, $22,470.
Required:
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. If an amount box does not require an entry, leave it blank.
2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.
At the end of a specific period of the business entity, there are a few adjustment entries that need to be made as per the accrual concept of accounting to record revenues and expenses fallen due during the period.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 17 images
