Prepare a statement of owner's equity for the year ended December 31, 20X1. The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $58,875 on January 1, 20X1, and $51,825 on December 31, 20X1. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses. Accounts 401 Sales $ 245,800 Credit 451 Sales Returns and Allowances 4,260 Debit 491 Miscellaneous Income 310 Credit 501 Purchases 102,700 Debit 502 Freight In 1,885 Debit 503 Purchases Returns and Allowances 3,510 Credit 504 Purchases Discounts 1,710 Credit 611 Salaries Expense—Sales 44,400 Debit 614 Store Supplies Expense 2,220 Debit 617 Depreciation Expense—Store Equipment 1,420 Debit 631 Rent Expense 12,600 Debit 634 Utilities Expense 2,910 Debit 637 Salaries Expense—Office 20,200 Debit 640 Payroll Taxes Expense 5,100 Debit 643 Depreciation Expense—Office Equipment 480 Debit 646 Uncollectible Accounts Expense 630 Debit 691 Interest Expense 560 Debit The worksheet of Bridget's Office Supplies contains the following owner’s equity accounts. No additional investments were made during the period. Accounts 301 Bridget Swanson, Capital $ 62,860 Credit 302 Bridget Swanson, Drawing 40,250 Debit Net income for the year $44,915.
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.
Prepare a statement of owner's equity for the year ended December 31, 20X1.
The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $58,875 on January 1, 20X1, and $51,825 on December 31, 20X1. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses.
| Accounts | ||
|---|---|---|
| 401 Sales | $ 245,800 | Credit |
| 451 Sales Returns and Allowances | 4,260 | Debit |
| 491 Miscellaneous Income | 310 | Credit |
| 501 Purchases | 102,700 | Debit |
| 502 Freight In | 1,885 | Debit |
| 503 Purchases Returns and Allowances | 3,510 | Credit |
| 504 Purchases Discounts | 1,710 | Credit |
| 611 Salaries Expense—Sales | 44,400 | Debit |
| 614 Store Supplies Expense | 2,220 | Debit |
| 617 |
1,420 | Debit |
| 631 Rent Expense | 12,600 | Debit |
| 634 Utilities Expense | 2,910 | Debit |
| 637 Salaries Expense—Office | 20,200 | Debit |
| 640 Payroll Taxes Expense | 5,100 | Debit |
| 643 Depreciation Expense—Office Equipment | 480 | Debit |
| 646 Uncollectible Accounts Expense | 630 | Debit |
| 691 Interest Expense | 560 | Debit |
The worksheet of Bridget's Office Supplies contains the following owner’s equity accounts. No additional investments were made during the period.
| Accounts | ||
|---|---|---|
| 301 Bridget Swanson, Capital | $ 62,860 | Credit |
| 302 Bridget Swanson, Drawing | 40,250 | Debit |
Net income for the year $44,915.
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