December 31, 2020 Cash Accounts Receivable 190,000 450,000 260,000 350,000 2,750,000 Prepaid Advertising Construction Supplies Construction Equipment Accumulated Depreciation-Construction Equipment Office Building Accumulated Depreciation-Office Building Accounts Payable Unearned Construction Revenue Notes Payable Datumolok, Capital Datumolok, Withdrawals Construction Revenues Salaries Expense Rent Expense Insurance Expense Utilities Expense Miscellaneous Expense 410,000 1,870,000 257,000 280,000 750,000 500,000 1,450,000 400,000 6,343,000 2,540,000 650,000 280,000 165,000 85.000 P 9,990,000 Total P9,990,000 The following information pertaining to the year-end adjustments is available: a) The P260,000 prepaid advertising represents payment made on December 1, 2020 for monthly advertising over the next 10 months. b) Engr. Datumolok decided to set-up provision for possible uncollectible clients accounts at 5% of the accounts receivable. c) A count of the construction supplies at December 31, 2020 revealed that P105,000 remained on hand. d) Payment of P45,00 for accounts payable last Dec. 17, 2020 was not recorded. e) Depreciation expenses for the period: P145,000 for the Construction Equipment, and P51,400 for the Office Building. 60% of the unearned construction revenues were earned at year-end. f) g) At year-end, salaries in the amount of P245,000 have accrued. This will be paid on January 3, 2021. h) Payment for utilities expense of P12,500 was erroneously recorded as P1,250 Interest of P50,000 on the notes payable is due for payment on January 10, 2021. 1) ) Of the recorded rent expense, P195,000 is for the months of January and February 2021. Activate Wir
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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