Chapter 3 Adjusting Accounts for Financial Statements The adiusted trial balance for Speedy Courier as of December 31, 2017, follows. Debit Credit Cash $ 58,000 Accounts receivable 120,000 Interest receivable 7,000 Notes receivable (due in 90 days) Office supplies 210,000 22,000 Trucks 134,000 Accumulated depreciation-Trucks Equipment Accumulated depreciation-Equipment. 24 58,000 270,000 200,000 Land 100,000 Accounts payable Interest payable 134,000 20,000 Salaries payable Unearned delivery fees Long-term notes payable L. Horace, Capital 28,000 120,000 200,000 olto125,000 50,000 L. Horace, Withdrawals 611,800 34,000 Delivery fees earned Interest earned Depreciation expense-Trucks Depreciation expense-Equipment Salaries expense 29,000 48,000 74,000 300,000 Wages expense Interest expense 15,000 31,000 Office supplies expense 27,200 Advertising expense 35,600 Repairs expense-Trucks $1,530,800 $1,530,800 Totals. Required . Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31, 2017, (b) the statement of owner's equity for the year ended December 31, 2017, and (c) the balance sheet as of December 31, 2017. * Compute the profit margin for year 2017 (use total revenues as the denominator).
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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