Prepare a corrected unadjusted trial balance.
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.
The following preliminary unadjusted
| Ranger Co. Unadjusted Trial Balance August 31, 20Y7 |
||||
| Debit Balances | Credit Balances | |||
| Cash | 55,150 | |||
| 25,920 | ||||
| Prepaid Insurance | 9,320 | |||
| Equipment | 8,700 | |||
| Accounts Payable | 15,110 | |||
| Unearned Rent | 3,360 | |||
| Carmen Meeks, Capital | 94,860 | |||
| Carmen Meeks, Drawing | 11,600 | |||
| Fees Earned | 97,620 | |||
| Wages Expense | 48,900 | |||
| Advertising Expense | 8,380 | |||
| Miscellaneous Expense | 1,650 | |||
| 204,610 | 175,960 |
When the ledger and other records are reviewed, you discover the following: (1) the debits and credits in the cash account total $55,150 and $39,600, respectively; (2) a billing of $2,920 to a customer on account was not posted to the accounts receivable account; (3) a payment of $2,100 made to a creditor on account was not posted to the accounts payable account; (4) the balance of the unearned rent account is $5,750; (5) the correct balance of the equipment account is $87,000; and (6) each account has a normal balance.
Prepare a corrected unadjusted trial balance. If an amount box does not require an entry, leave it blank.
| Ranger Co. | ||
| Unadjusted Trial Balance | ||
| August 31, 20Y7 | ||
| Debit Balances |
Credit Balances |
|
| Cash | fill in the blank 1 | fill in the blank 2 |
| Accounts Receivable | fill in the blank 3 | fill in the blank 4 |
| Prepaid Insurance | fill in the blank 5 | fill in the blank 6 |
| Equipment | fill in the blank 7 | fill in the blank 8 |
| Accounts Payable | fill in the blank 9 | fill in the blank 10 |
| Unearned Rent | fill in the blank 11 | fill in the blank 12 |
| Carmen Meeks, Capital | fill in the blank 13 | fill in the blank 14 |
| Carmen Meeks, Drawing | fill in the blank 15 | fill in the blank 16 |
| Fees Earned | fill in the blank 17 | fill in the blank 18 |
| Wages Expense | fill in the blank 19 | fill in the blank 20 |
| Advertising Expense | fill in the blank 21 | fill in the blank 22 |
| Miscellaneous Expense | fill in the blank 23 | fill in the blank 24 |
| fill in the blank 25 | fill in the blank 26 |
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