The Crane Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. CRANE HOTEL Trial Balance May 31, 2022 Debit Credit Cash $2,593 Supplies 2,600 Prepaid Insurance 1,800 Land 15,093 Buildings 72,400 Equipment 16,800 Accounts Payable $4,793 Unearned Rent Revenue 3,300 Mortgage Payable 38,400 Common Stock 60,093 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $115,586 $115,586 Other data: 1. Insurance expires at the rate of $360 per month. 2. A count of supplies shows $1,150 of unused supplies on May 31. 3. (a) Annual depreciation is $3,600 on the building. (b) Annual depreciation is $3,000 on equipment. 4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,630 has been earned. 6. Salaries of $750 are accrued and unpaid at May 31. Journalize the adjusting entries on May 31. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Insurance Expense 360 Prepald Insurance 360 2. Supplies Expense 1450 Supplies 1450 3 (a). Depreciation Expense 300 Accumulated Depreclation-Buildings 300 3 (b). Depreciation Expense 250 Accumulated Depreciation-Equipment 250 4. Interest Expense 160 Interest Payable 160 5. Unearned Rent Revenue 2630 Rent Revenue 2630 6. Salarles and Wages Expense 750 Salarles and Wages Payable 750
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 a ledger using T accounts .Enter the
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