ournalize the adjusting entries using the adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. Adjustment data: a. Office Supplies on hand, $100. b. Accrued Service Revenue, $1,000. c. Accrued Salaries Expense, $1,600. d. Prepaid Insurance for the month has expired. (On December 1, Munroe paid $450 cash for a three-month insurance policy. The policy began December 1. On December31 Munroe recorded $150 as an expense for the expiration of this prepaid insurance for the month of December.) e. Depreciation was recorded on the truck for the month. (On December 1, Munroe received a truck valued at $14,000 from the owner, Richard Munroe. On December 31, Munroe recorded $150 as an expense for the month of December for depreciation on the truck using the straight-line method, a useful life of five years, and a salvage value of $5,000. More info Jan. 3 Collected $700 cash from customer on account. Jan. 5 Purchased office supplies on account, $700. Jan. 12 Performed delivery services for a customer and received $3,500 cash. Jan. 15 Paid employee salary including the amount owed on December 31, $3,300. (The total cash paid of $3,300 includes the amount owed on December 31.) Jan. 18 Performed delivery services on account, $2,610. Jan. 20 Paid $650 on account. Jan. 24 Purchased fuel for the truck, paying $190 cash. Jan. 27 Completed the remaining work due for Unearned Revenue. Jan. 28 Paid office rent, $2,300, for the month of January. Jan. 30 Collected $2,500 in advance for delivery service to be performed later. Jan. 31 Munroe withdrew cash of $4,500. More info Jan. 3 Collected $700 cash from customer on account.
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.
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1.
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Journalize the
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Adjustment data:
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Jan. 3
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Collected $700 cash from customer on account.
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Jan. 5
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Purchased office supplies on account, $700.
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Jan. 12
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Performed delivery services for a customer and received $3,500 cash.
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Jan. 15
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Paid employee salary including the amount owed on December 31, $3,300. (The total cash paid of $3,300 includes the amount owed on December 31.)
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Jan. 18
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Performed delivery services on account, $2,610.
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Jan. 20
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Paid $650 on account.
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Jan. 24
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Purchased fuel for the truck, paying $190 cash.
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Jan. 27
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Completed the remaining work due for Unearned Revenue.
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Jan. 28
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Paid office rent, $2,300, for the month of January.
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Jan. 30
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Collected $2,500 in advance for delivery service to be performed later.
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Jan. 31
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Munroe withdrew cash of $4,500.
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Jan. 3
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Collected $700 cash from customer on account.
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Jan. 5
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Purchased office supplies on account, $700.
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Jan. 12
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Performed delivery services for a customer and received $3,500 cash.
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Jan. 15
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Paid employee salary including the amount owed on December 31, $3,300. (The total cash paid of $3,300 includes the amount owed on December 31.)
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Jan. 18
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Performed delivery services on account, $2,610.
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Jan. 20
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Paid $650 on account.
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Jan. 24
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Purchased fuel for the truck, paying $190 cash.
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Jan. 27
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Completed the remaining work due for Unearned Revenue.
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Jan. 28
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Paid office rent, $2,300, for the month of January.
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Jan. 30
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Collected $2,500 in advance for delivery service to be performed later.
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Jan. 31
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Munroe withdrew cash of $4,500.
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