In addition to those accounts listed on the trial balance, the chart of accounts for Walker Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense. Other data: 1. $800 of supplies have been used during the month. 2. Utilities expense incurred but not paid on May 31, 2022, $300. 3. An insurance policy for 2 years was purchased on May 1. 4. $400 of the balance in the unearned service revenue account remains unearned at the end of the month. 5. May 31 is a Wednesday, and employees are paid on Fridays. Walker Consulting has two employees, who are paid $1,100 each for a 5-day work week. 6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $200 per month for 60 months. 7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31. Prepare the adjusting entries for the month of May as well as an adjusted trial balance
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.
In addition to those accounts listed on the
Other data:
| 1. | $800 of supplies have been used during the month. | |
| 2. | Utilities expense incurred but not paid on May 31, 2022, $300. | |
| 3. | An insurance policy for 2 years was purchased on May 1. | |
| 4. | $400 of the balance in the unearned service revenue account remains unearned at the end of the month. | |
| 5. | May 31 is a Wednesday, and employees are paid on Fridays. Walker Consulting has two employees, who are paid $1,100 each for a 5-day work week. | |
| 6. | The office furniture has a 5-year life with no salvage value. It is being depreciated at $200 per month for 60 months. | |
| 7. | Invoices representing $1,700 of services performed during the month have not been recorded as of May 31. |
Prepare the
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