ASSIGNMENT #3 - QUESTION 2 Information from the December 31, 2020, year-end unadjusted trial balance of Woodstock Store is as follows: Debit Credit Cash $ 3,500 Merchandise inventory. 31,400 Store supplies. 1,715 Office supplies. 645 Prepaid insurance 3,960 Store equipment. 57,615 Accumulated depreciation, store equipment $ 6,750 Office equipment. 13,100 Accumulated depreciation, office equipment. 6,550 Accounts payable. 4,000 Zen Woodstock, capital. 52,000 Zen Woodstock, withdrawals 31,500 Rental revenue. 14,600 Sales. 501,520 Sales returns and allowances 2,915 Sales discounts. 5,190 Purchases. 331,315 Purchase returns and allowances 2,140 Purchase discounts. 4,725 Transportation-in 3,690 Sales salaries expense 34,710 Rent expense, selling space. 24,000 6,400 Advertising expense. Store supplies expense. Depreciation expense, store equipment. -0- Office salaries expense. 27,630 Rent expense, office space. 13,000 Office supplies expense. -0- Insurance expense -0- Depreciation expense, office equipment -0- Totals $592,285 $592.285 Additional information: a. The balance on January 1, 2020, in the Store Supplies account was $480. During the year, $1,235 of store supplies were purchased and debited to the Store Supplies account. A physical count on December 31, 2020, shows an ending balance of $180. b. The balance on January 1, 2020, in the Office Supplies account was $50. Office supplies of $595 were purchased in 2020 and added to the Office Supplies account. An examination of the office supplies at year- end revealed that $590 had been used. c. The balance in the Prepaid Insurance account represents a policy purchased on September 1, 2020; it was valid for 12 months from that date. d. The store equipment was originally estimated to have a useful life of 12 years and a residual value of $3,615. e. When the office equipment was purchased, it was estimated that it would last four years and have no residual value. f. Ending merchandise inventory, $29,000. Required Analyze and determine the impact of the adjustments from (a) to (f) on the unadjusted trial bal- ance numbers. Prepare a classified multiple-step income statemen using your adjusted trial balance numbers.
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.
![ASSIGNMENT #3 – QUESTION 2
Information from the December 31, 2020, year-end unadjusted trial balance of Woodstock Store is as
follows:
Debit
Credit
Cash.
$ 3,500
Merchandise inventory
Store supplies
31,400
1,715
Office supplies.
645
Prepaid insurance.
3,960
Store equipment.
57,615
Accumulated depreciation, store equipment.
$ 6,750
Office equipment.
13,100
Accumulated depreciation, office equipment.
6,550
Accounts payable..
4,000
Zen Woodstock, capital.
52,000
Zen Woodstock, withdrawals
31,500
Rental revenue.
14,600
Sales.
501,520
Sales returns and allowances.
2,915
Sales discounts.
5,190
Purchases.
331,315
Purchase returns and allowances.
2,140
Purchase discounts.
4,725
Transportation-in
3,690
Sales salaries expense
34,710
Rent expense, selling space.
24,000
Advertising expense.
6,400
Store supplies expense
-0-
Depreciation expense, store equipment
-0-
Office salaries expense
27,630
Rent expense, office space
13,000
Office supplies expense.
-0-
Insurance expense.
-0-
Depreciation expense, office equipment.
-O-
Totals.
$592,285
$592,285
Additional information:
a. The balance on January 1, 2020, in the Store Supplies account was $480. During the year, $1,235 of store
supplies were purchased and debited to the Store Supplies account. A physical count on December 31,
2020, shows an ending balance of $180.
b. The balance on January 1, 2020, in the Office Supplies account was $50. Office supplies of $595 were
purchased in 2020 and added to the Office Supplies account. An examination of the office supplies at year-
end revealed that $590 had been used.
c. The balance in the Prepaid Insurance account represents a policy purchased on September 1, 2020; it was
valid for 12 months from that date.
d. The store equipment was originally estimated to have a useful life of 12 years and a residual value of $3,615.
e. When the office equipment was purchased, it was estimated that it would last four years and have no
residual value.
f. Ending merchandise inventory, $29,000.
Required Analyze and determine the impact of the adjustments from (a) to (f) on the unadjusted trial bal-
ance numbers. Prepare a classified multiple-step income statementE
using your adjusted trial
balance numbers.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac6d2a9e-9d7a-43e5-9226-065073c71cc3%2Fc64e998f-a2f7-44e2-81da-a68132d2ff4e%2Fvnaa6hd_processed.jpeg&w=3840&q=75)
![On June 1, 2020, Sam Near created a new travel agency called Tours-For-Less. These activities occurred during
the company's first month:
June 1 Near created the new company by investing $40,000 cash, $5,000 of furniture, and computer equipment worth
$60,000.
2 The company rented furnished office space by paying $3,200 rent for the first month.
3 The company purchased $2,400 of office supplies for cash.
10 The company paid $7,200 for the premium on a one-year insurance policy.
14 The owner's assistant was paid $3,600 for two weeks' salary.
24 The company collected $13,600 of commissions from airlines on tickets obtained for customers.
The assistant was paid another $3,600 for two weeks' salary.
28
The company paid the month's $3,500 phone bill.
The company repaired its computer for $700 on account.
29
30
30
The owner withdrew $2,850 cash from the business for personal use.
The company's chart of accounts included these accounts:
101
Cash
302 Sam Near, Withdrawals
106 Accounts Receivable
405 Commissions Revenue
124 Office Supplies
610 Depreciation Expense, Furniture
128 Prepaid Insurance
612 Depreciation Expense, Computer Equipment
160
Furniture
622 Salaries Expense
161
Accumulated Depreciation, Furniture
637 Insurance Expense
167 Computer Equipment
640 Rent Expense
168 Accumulated Depreciation, Computer Equipment
650 Office Supplies Expense
201
Accounts Payable
684 Repairs Expense
209 Salaries Payable
688 Telephone Expense
301 Sam Near, Capital
901 Income Summary
Required
1. Setupench ef the listed accounts.
use e
T-accounts.
2. Prepare journal entries to record the transactions for June and post them to the accounts.
3. Use the following information to journalize and post the adjustments for the month:
a. Two-thirds of one month's insurance coverage was consumed.
b. There were $1,600 of office supplies on hand at the end of the month.
c. Depreciation on the computer equipment was estimated to be $1,650 and $400 on the furniture.
d. The assistant had earned $320 of unpaid and unrecorded salary.
e. The company had earned $3,500 of commissions that had not yet been billed.
4. Prepare an income statement, a statement of changes in equity, and a classified balance sheet.
5. Prepare journal entries to close the temporary accounts and post them to the accounts.
6. Prepare a post-closing trial balance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac6d2a9e-9d7a-43e5-9226-065073c71cc3%2Fc64e998f-a2f7-44e2-81da-a68132d2ff4e%2F3ai608j_processed.jpeg&w=3840&q=75)
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