Cullumber's Hotel opened for business on May 1, 2022. Its trial balance before adjustment on May 31 is as follows. Account Number 101 126 130 140 141 149 200 201 208 301 429 610 726 732 CULLUMBER'S HOTEL Trial Balance May 31, 2022 Cash Supplies Prepaid Insurance Land Buildings Equipment Notes Payable Accounts Payable Unearned Rent Revenue Owner's Capital Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense Debit $3,400 2.050 1,800 13,000 58.800 15,600 600 3.200 950 Credit $ 40,000 4,900 3,000 41.000 10,500 $99,400 $99,400 In addition to those accounts listed on the trial balance, the chart of accounts for Cullumber's Hotel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-Buildings, No. 150 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance 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.
Prepare an income statement for the month of May.
Please don't provide answer image based thnku
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
