James Graphics Company was organized on January 1, 2020, by James Smith. At the end of the first 6 months of operations, the trial balance contained the accounts shown below. Debits Credits $ 8,000 Notes Payable $ 18,000 Cash Accounts Receivable 13,500 Accounts Payable 8,500 Equipment 42,000 Owner's Capital 21,500 Insurance Expense 2,400 Sales Revenue 49,600 Salaries and Wages Expense 29,500 Service Revenue 5,500 Supplies Expense 3,300 Advertising Expense 1,700 Rent Expense 1,300 Utilities Expense 1,400 $103,100 $103,100 Analysis reveals the following additional data. 1. The $3,300 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies was on hand. 2. The note payable was issued on February 1. It is a 8%, 6-month note. 3. The balance in Insurance Expense is the premium on a one-year policy, dated April 1, 2020. 4. Service revenues are credited to revenue when received. At June 30, services revenue of $1,100 are unearned. 5. Revenue for services performed but unrecorded at June 30 totals $1,500. 6. Depreciation is $2,000 per year.
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.
Journalize the
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