nts Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 3,665 3,665
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.
| Megaffin's Repairs Work Sheet For Month Ended January 31, 20-- |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Adjustments | Adjusted Trial Balance | Income Statement | ||||||||
| Account Title | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit |
| Cash | 3,665 | 3,665 | 3,665 | |||||||
| 1,440 | 1,440 | 1,440 | ||||||||
| Supplies | 707 | 308 | 399 | 399 | ||||||
| Prepaid Insurance | 908 | 229 | 679 | 679 | ||||||
| Delivery Equipment | 3,245 | 3,245 | 3,245 | |||||||
| 57 | 57 | 57 | ||||||||
| Accounts Payable | 1,218 | 1,218 | 1,218 | |||||||
| Wages Payable | 401 | 401 | 401 | |||||||
| Don Megaffn, Capital | 8,026 | 8,026 | 8,026 | |||||||
| Don Megaffn, Drawing | 1,119 | 1,119 | 1,119 | |||||||
| Repair Fees | 4,712 | 4,712 | 4,712 | |||||||
| Wages Expense | 1,757 | 401 | 2,158 | 2,158 | ||||||
| Advertising Expense | 197 | 197 | 197 | |||||||
| Rent Expense | 633 | 633 | 633 | |||||||
| Supplies Expense | 308 | 308 | 308 | |||||||
| Phone Expense | 52 | 52 | 52 | |||||||
| Insurance Expense | 229 | 229 | 229 | |||||||
| Gas and Oil Expense | 197 | 197 | 197 | |||||||
| Depreciation Expense - Delivery Equipment | 57 | 57 | 57 | |||||||
| Miscellaneous Expense | 36 | 36 | 36 | |||||||
| 13,956 | 13,956 | 995 | 995 | 14,414 | 14,414 | 3,867 | 4,712 | 10,547 | 9,702 | |
| Net Income | 845 | 845 | ||||||||
| 4,712 | 4,712 | 10,547 | 10,547 |
1. Journalize the
| GENERAL JOURNAL | PAGE 10 | |||
|---|---|---|---|---|
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT |
| Adjusting Entries | ||||
| 20-- | ||||
| Jan. 31 | fill in the blank 5dd27c003fd7013_2 | fill in the blank 5dd27c003fd7013_3 | ||
| fill in the blank 5dd27c003fd7013_5 | fill in the blank 5dd27c003fd7013_6 | |||
| Jan. 31 | fill in the blank 5dd27c003fd7013_8 | fill in the blank 5dd27c003fd7013_9 | ||
| fill in the blank 5dd27c003fd7013_11 | fill in the blank 5dd27c003fd7013_12 | |||
| Jan. 31 | fill in the blank 5dd27c003fd7013_14 | fill in the blank 5dd27c003fd7013_15 | ||
| fill in the blank 5dd27c003fd7013_17 | fill in the blank 5dd27c003fd7013_18 | |||
| Jan. 31 | fill in the blank 5dd27c003fd7013_20 | fill in the blank 5dd27c003fd7013_21 | ||
| fill in the blank 5dd27c003fd7013_23 | fill in the blank 5dd27c003fd7013_24 |
2. Journalize the closing entries. If an amount box does not require an entry, leave it blank or enter "0". Do not enter the posting references until you complete part 3.
| GENERAL JOURNAL | PAGE 11 | |||
|---|---|---|---|---|
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT |
| Closing Entries | ||||
| 20-- | ||||
| Jan. 31 | fill in the blank 5dd27c003fd7013_26 | fill in the blank 5dd27c003fd7013_27 | ||
| fill in the blank 5dd27c003fd7013_29 | fill in the blank 5dd27c003fd7013_30 | |||
| Jan. 31 | fill in the blank 5dd27c003fd7013_32 | fill in the blank 5dd27c003fd7013_33 | fill in the blank 5dd27c003fd7013_34 | |
| fill in the blank 5dd27c003fd7013_36 | fill in the blank 5dd27c003fd7013_37 | fill in the blank 5dd27c003fd7013_38 | ||
| fill in the blank 5dd27c003fd7013_40 | fill in the blank 5dd27c003fd7013_41 | fill in the blank 5dd27c003fd7013_42 | ||
| fill in the blank 5dd27c003fd7013_44 | fill in the blank 5dd27c003fd7013_45 | fill in the blank 5dd27c003fd7013_46 | ||
| fill in the blank 5dd27c003fd7013_48 | fill in the blank 5dd27c003fd7013_49 | fill in the blank 5dd27c003fd7013_50 | ||
| fill in the blank 5dd27c003fd7013_52 | fill in the blank 5dd27c003fd7013_53 | fill in the blank 5dd27c003fd7013_54 | ||
| fill in the blank 5dd27c003fd7013_56 | fill in the blank 5dd27c003fd7013_57 | fill in the blank 5dd27c003fd7013_58 | ||
| fill in the blank 5dd27c003fd7013_60 | fill in the blank 5dd27c003fd7013_61 | fill in the blank 5dd27c003fd7013_62 | ||
| fill in the blank 5dd27c003fd7013_64 | fill in the blank 5dd27c003fd7013_65 | fill in the blank 5dd27c003fd7013_66 | ||
| fill in the blank 5dd27c003fd7013_68 | fill in the blank 5dd27c003fd7013_69 | fill in the blank 5dd27c003fd7013_70 | ||
| Jan. 31 | fill in the blank 5dd27c003fd7013_72 | fill in the blank 5dd27c003fd7013_73 | ||
| fill in the blank 5dd27c003fd7013_75 | fill in the blank 5dd27c003fd7013_76 | |||
| Jan. 31 | fill in the blank 5dd27c003fd7013_78 | fill in the blank 5dd27c003fd7013_79 | ||
| fill in the blank 5dd27c003fd7013_81 | fill in the blank 5dd27c003fd7013_82 |
3. The trial balance amounts (before adjustments) have been entered in the ledger accounts.
A chart of accounts is provided below.
| Megaffin's Repairs Chart of Accounts |
|||
| Assets | Revenues | ||
| 101 | Cash | 401 | Repair Fees |
| 122 | Accounts Receivable | ||
| 141 | Supplies | Expenses | |
| 145 | Prepaid Insurance | 511 | Wages Expense |
| 185 | Delivery Equipment | 512 | Advertising Expense |
| 185.1 | Accum. Depr.––Delivery Equip. | 521 | Rent Expense |
| 523 | Supplies Expense | ||
| Liabilities | 525 | Phone Expense | |
| 202 | Accounts Payable | 535 | Insurance Expense |
| 219 | Wages Payable | 538 | Gas and Oil Expense |
| 541 | Depr. Exp.—Delivery Equip. | ||
| Owner's Equity | 549 | Miscellaneous Expense | |
| 311 | Don Megaffin, Capital | ||
| 312 | Don Megaffin, Drawing | ||
| 313 | Income Summary |
| GENERAL LEDGER | ||||||
|---|---|---|---|---|---|---|
| ACCOUNT | Cash | ACCOUNT NO. | 101 | |||
| BALANCE | ||||||
| DATE | ITEM | POST. REF. | DEBIT | CREDIT | DEBIT | CREDIT |
| 20-- | ||||||
| Jan. 31 | Balance | √ | 3,665 |
| ACCOUNT | Accounts Receivable | ACCOUNT NO. | 122 | |||
|---|---|---|---|---|---|---|
| BALANCE | ||||||
| DATE | ITEM | POST. REF. | DEBIT | CREDIT | DEBIT | CREDIT |
| 20-- | ||||||
| Jan. 31 | Balance | √ | 1,440 |
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