On January 1, 2024, the general ledger of 3D Family Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Supplies Notes Receivable (5%, due in 2 years) Land Land Accounts Payable Common Stock Retained Earnings Totals Debit $24,700 14,000 2,900 24,000 77,400 $143,000 Credit $1,500 8,700 100,000 32,800 $143,000 During January 2024, the following transactions occur: January 2 Provide services to customers for cash, $39,100. January 6 Provide services to customers on account, $76,400. January 15 Write off accounts receivable as uncollectible, $1,400. (Assume the company uses the allowance method) January 20 Pay cash for salaries, $31,800. January 22 Receive cash on accounts receivable, $74,000. January 25 Pay cash on accounts payable, $5,900. January 30 Pay cash for utilities during January, $14,100. The following information is available on January 31, 2024. a. The company estimates future uncollectible accounts. The company determines $5,400 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger to split total accounts receivable into the $5,400 past due and the remaining amount not past due.) b. Supplies at the end of January total $900. All other supplies have been used. c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. d. Unpaid salaries at the end of January are $33,900.
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
