Journalize Adjusting Entries for a Merchandising Business The following partial spreadsheet is taken from the books of Vinnie’s Vegetable Market, for the year ended December 31, 20--. Vinnie’s Vegetable Market End-of-Period Spreadsheet (Partial) For Year Ended December 31, 20-- ACCOUNT TITLE TRIAL BALANCE ADJUSTMENTS DEBIT CREDIT DEBIT CREDIT Merchandise Inventory 45,000.00 (b) 50,000.00 (a) 45,000.00 Supplies 10,000.00 (d) 7,000.00 Building 60,000.00 Accum. Depr.—Building 15,000.00 (e) 5,000.00 Wages Payable (f) 1,200.00 Unearned Membership Fees 3,000.00 (c) 2,000.00 Income Summary (a) 45,000.00 (b) 50,000.00 Membership Fees 20,000.00 (c) 2,000.00 Wages Expense 37,000.00 (f) 1,200.00 Supplies Expense (d) 7,000.00 Depr. Expense—Building (e) 5,000.00 110,200.00 110,200.00 Journalize the adjustments in a general journal. Page: 1 ROW NUMBER DATE ACCOUNT TITLE DOC. NO. POST. REF. DEBIT CREDIT ROW NUMBER 1 20-- Dec. 31 blank blank Income Summary Income Summary 1 2 blank blank blank Merchandise Inventory Merchandise Inventory 2 3 blank blank blank blank blank blank 3 4 Dec. 31 blank blank Merchandise Inventory Merchandise Inventory 4 5 blank blank blank Income Summary Income Summary 5 6 blank blank blank blank blank blank 6 7 Dec. 31 blank blank Income Summary Income Summary 7 8 blank blank blank Unearned Membership Fees Unearned
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 following partial spreadsheet is taken from the books of Vinnie’s Vegetable Market, for the year ended December 31, 20--.
| Vinnie’s Vegetable Market End-of-Period Spreadsheet (Partial) For Year Ended December 31, 20-- |
||||
|---|---|---|---|---|
| ACCOUNT TITLE | ADJUSTMENTS | |||
| DEBIT | CREDIT | DEBIT | CREDIT | |
| Merchandise Inventory | 45,000.00 | (b) 50,000.00 | (a) 45,000.00 | |
| Supplies | 10,000.00 | (d) 7,000.00 | ||
| Building | 60,000.00 | |||
| Accum. Depr.—Building | 15,000.00 | (e) 5,000.00 | ||
| Wages Payable | (f) 1,200.00 | |||
| Unearned Membership Fees | 3,000.00 | (c) 2,000.00 | ||
| Income Summary | (a) 45,000.00 | (b) 50,000.00 | ||
| Membership Fees | 20,000.00 | (c) 2,000.00 | ||
| Wages Expense | 37,000.00 | (f) 1,200.00 | ||
| Supplies Expense | (d) 7,000.00 | |||
| Depr. Expense—Building | (e) 5,000.00 | |||
| 110,200.00 | 110,200.00 |
Journalize the adjustments in a general journal.
Page: 1
| ROW NUMBER | DATE | ACCOUNT TITLE | DOC. NO. |
POST. REF. |
DEBIT | CREDIT | ROW NUMBER |
|---|---|---|---|---|---|---|---|
| 1 | 20-- Dec. 31 |
|
blank | blank | Income Summary | Income Summary | 1 |
| 2 | blank |
|
blank | blank | Merchandise Inventory | Merchandise Inventory | 2 |
| 3 | blank | blank | blank | blank | blank | blank | 3 |
| 4 | Dec. 31 |
|
blank | blank | Merchandise Inventory | Merchandise Inventory | 4 |
| 5 | blank |
|
blank | blank | Income Summary | Income Summary | 5 |
| 6 | blank | blank | blank | blank | blank | blank | 6 |
| 7 | Dec. 31 |
|
blank | blank | Income Summary | Income Summary | 7 |
| 8 | blank |
|
blank | blank | Unearned Membership Fees | Unearned Membership Fees | 8 |
| 9 | blank | blank | blank | blank | blank | blank | 9 |
| 10 | Dec. 31 |
|
blank | blank | - Select - | - Select - | 10 |
| 11 | blank |
|
blank | blank | - Select - | - Select - | 11 |
| 12 | blank | blank | blank | blank | blank | blank | 12 |
| 13 | Dec. 31 |
|
blank | blank | - Select - | - Select - | 13 |
| 14 | blank |
|
blank | blank | - Select - | - Select - | 14 |
| 15 | blank | blank | blank | blank | blank | blank | 15 |
| 16 | Dec. 31 |
|
blank | blank | - Select - | - Select - | 16 |
| 17 | blank |
|
blank | blank | - Select - | - Select - | 17 |
| 18 | blank | blank | blank | blank | blank | blank | 18 |
The journal entries are prepared to keep the record of day to day transactions of the business on regular basis.
The adjustment entries are prepared to keep the record of day to day transactions of the business at the end of the year.
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