Horace Culpepper, CA, was retained by Pulsar Cable to prepare financial statements for April 2020. Horace accumulated all the ledger balances per Pulsar’s records and found the following. Analyze errors and prepare correcting entries and trial balance. Pulsar Cable Trial Balance April 30, 2020 Debit Credit Cash £ 4,100 Accounts Receivable 3,200 Supplies 800 Equipment 10,800 Accumulated Depreciation—Equip. £ 1,350 Accounts Payable 2,100 Salaries and Wages Payable 700 Unearned Service Revenue 890 Share Capital—Ordinary 10,100 Retained Earnings 2,800 Service Revenue 5,650 Salaries and Wages Expense 3,300 Advertising Expense 600 Miscellaneous Expense 290 Depreciation Expense 500 £23,590 £23,590 Horace Culpepper found the following errors. 1. Cash received from a customer on account was recorded as £950 instead of £590. 2. A payment of £75 for advertising expense was entered as a debit to Miscellaneous Expense £75 and a credit to Cash £75. 3. The first salary payment this month was for £1,900, which included £700 of salaries payable on March 31. The payment was recorded as a debit to Salaries and Wages Expense £1,900 and a credit to Cash £1,900. (No reversing entries were made on April 1.) 4. The purchase on account of a printer costing £310 was recorded as a debit to Supplies and a credit to Accounts Payable for £310. 5. A cash payment of repair expense on equipment for £96 was recorded as a debit to Equipment £69 and a credit to Cash £69. Instructions a. Prepare an analysis of each error showing (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. Items 4 and 5 occurred on April 30, 2020. b. Prepare a correct trial balance. Trial balance £22,890
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.
Horace Culpepper, CA, was retained by Pulsar Cable to prepare financial statements for April 2020. Horace accumulated all the ledger balances per Pulsar’s records and found the following. Analyze errors and prepare correcting entries and
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