Financial Statement Preparation - II. The following accounts were taken from the adjusted trial balance of Mariell's Beauty Salon, a Calendar - year business, as of December 31, 2019 (disregarding effect of income taxes): Debit Credit Debit Credit P54,000 Interest Income Accounts Payable Accounts Receivable P96,000 15,000 Interest Receivable 15,000 Accumulated 20,000 Investment Income 3,500 Depreciation- Beauty Machine Accumulated 10,000 Investment in 70,000 Depreciation - Trading Securities Furniture and Fixture Accumulated 6,500 Notes Receivable - 150,000 Depreciation - Office due in two years Equipment Allowance for Doubtful Accounts Mariell, Capital 15,000 Office Equipment 70,000 ? Office Supplies 8,000 Mariell, Drawing 40,000 Salon Revenues 980,000 Beauty Machine 220,000 Rent Expense 144,000 Cash 120,000 Salaries Expense 312,000 Depreciation 36,500 Salaries Payable 12,000 Expense Doubtful Accounts 15,000 Utilities Expense 77,500 Expense Furniture and Fixture 120,000 Totals P1,494,000 P1,494,000 Prepare the following: 1. Income Statement- natural form 2. Statement of Changes in Owner's Equity 3. Statement of Financial Position - report form
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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