P4-1B Sherlock Holmes began operations as a private investigatore lunary 1.2005. The th halance columns of the work sheet for Sherlock Holmes Pat March 31 are as follows SHERLOCK HOLMES P.I. Work Sheet For the Quarter Ended March 31, 2005 Trial Balance Account Titles Dr. Cr. Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable 11,400 5,620 1,050 2,400 30,000 10,000 11260
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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PROBLEMS: SET B
P4-1B Sherlock Holmes began operations as a private investigator an lansary 1.2005. The tha
balance columns of the work sheet for Sherlock Holmes Pat March 31 are as follows
SHERLOCK HOLMES P.I.
Work Sheet
For the Quarter Ended March 31, 2005
Trial Balance
Account Titles
Dr.
Cr.
Cash
Accounts Receivable
11,400
5,620
1.050
2,400
30.000
Supplies
Prepaid Insurance
Equipment
Notes Payable
Accounts Payable
S. Holmes, Capital
S. Holmes, Drawing
10,000
12,350
20,000
600
Service Revenue
13,620
Salaries Expense
Travel Expense
Rent Expense
Miscellaneous Expense
2,200
1,300
1,200
200
55,970
55.970
Other data:
1. Supplies on hand total $680.
2. Depreciation is $1,000 per quarter.
3. Interest accrued on 6-month note payable, issued January 1, $300.
4. Insurance expires at the rate of $200 per month.
5. Services provided but unbilled at March 31 total $830.
Instructions
(a) Enter the trial balance on a work sheet and complete the work sheet.
(b) Prepare an income statement and owner's equity statement for the quarter an
balance sheet at March 31. S. Holmes did not make any additional investmen
ness during the quarter ended March 31, 2005.
(c) Journalize the adjusting entries from the adjustments columns of the work s
(d) Journalize the s
es from the financial statement columns of the w](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F31e764b6-889e-4db5-ae8d-ac5158e77f98%2Faf9ff62d-7b59-4e8b-b4e7-4cdc222cde83%2Fgwbccr9_processed.jpeg&w=3840&q=75)
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