Chloe has done the accounting through August 16, the first sixteen days of business for her company. She has given you her trial balance as of August 16, 2019, as follows. Chloe’s Cleaning Services UNADJUSTED TRIAL BALANCE August 16, 2019 ACCOUNT TITLE DEBIT CREDIT 1 Cash 7,710.00 2 Accounts Receivable 4,575.00 3 Supplies 3,200.00 4 Equipment 7,500.00 5 Accounts Payable 3,350.00 6 Wages Payable 360.00 7 Chloe Sanderson, Capital 20,000.00 8 Fees Earned 5,500.00 9 Wages Expense 3,600.00 10 Insurance Expense 100.00 11 Supplies Expense 1,300.00 12 Repairs Expense 250.00 13 Advertising Expense 550.00 14 Utilities Expense 350.00 15 Miscellaneous Expense 75.00 16 Totals 29,210.00 29,210.00 Chloe has prepared the following table, showing the balances as of August 16 for her Accounts Receivable Subsidiary Ledger and Accounts Payable Subsidiary Ledger. Accounts Receivable Subsidiary Ledger Balances Customer Name Balance as of August 16 Central Medical Offices, Inc. $2,500 Functional Fitness Company 800 Omega Multiplex Theater 1,275 Accounts Payable Subsidiary Ledger Balances Vendor Name Balance as of August 16 Cleaning Supplies Warehouse $2,750 Sudsy’s Laundry 600 Now that the remaining August transactions have been entered, Chloe feels confident enough to complete the end-of-month totals and posting. Help Chloe finish her accounting for the month by computing the following amounts. Account Balance as of August 31, 2019 Cash Accounts Receivable Accounts Payable Accounts Receivable Subsidiary Ledger for Central Medical Offices, Inc. Accounts Receivable Subsidiary Ledger for Functional Fitness Company Accounts Receivable Subsidiary Ledger for Omega Multiplex Theater Accounts Payable Subsidiary Ledger for Cleaning Supplies Warehouse Accounts Payable Subsidiary Ledger for Sudsy’s Laundry Wages 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.
| ACCOUNT TITLE | DEBIT | CREDIT | |
|---|---|---|---|
|
1
|
Cash
|
7,710.00
|
|
|
2
|
Accounts Receivable
|
4,575.00
|
|
|
3
|
Supplies
|
3,200.00
|
|
|
4
|
Equipment
|
7,500.00
|
|
|
5
|
Accounts Payable
|
|
3,350.00
|
|
6
|
Wages Payable
|
|
360.00
|
|
7
|
Chloe Sanderson, Capital
|
|
20,000.00
|
|
8
|
Fees Earned
|
|
5,500.00
|
|
9
|
Wages Expense
|
3,600.00
|
|
|
10
|
Insurance Expense
|
100.00
|
|
|
11
|
Supplies Expense
|
1,300.00
|
|
|
12
|
Repairs Expense
|
250.00
|
|
|
13
|
Advertising Expense
|
550.00
|
|
|
14
|
Utilities Expense
|
350.00
|
|
|
15
|
Miscellaneous Expense
|
75.00
|
|
|
16
|
Totals
|
29,210.00
|
29,210.00
|
|
Accounts Receivable Subsidiary Ledger Balances
|
|
| Customer Name | Balance as of August 16 |
| Central Medical Offices, Inc. | $2,500 |
| Functional Fitness Company | 800 |
| Omega Multiplex Theater | 1,275 |
|
Accounts Payable Subsidiary Ledger Balances
|
|
| Vendor Name | Balance as of August 16 |
| Cleaning Supplies Warehouse | $2,750 |
| Sudsy’s Laundry | 600 |
|
Account
|
Balance as of August 31, 2019
|
| Cash |
|
| Accounts Receivable |
|
| Accounts Payable |
|
| Accounts Receivable Subsidiary Ledger for Central Medical Offices, Inc. |
|
| Accounts Receivable Subsidiary Ledger for Functional Fitness Company |
|
| Accounts Receivable Subsidiary Ledger for Omega Multiplex Theater |
|
| Accounts Payable Subsidiary Ledger for Cleaning Supplies Warehouse |
|
| Accounts Payable Subsidiary Ledger for Sudsy’s Laundry |
|
| Wages Expense |
|
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