Prepare adjusting entries as of December 31, 2021 for the following: ACCRUAL TYPE 1. A company rents the ground floor of a building at P20,000 per month. As of December 31, the firm has not paid yet its rent for the last quarter of 2021. 2. A company issued on November 16, 2021 a 90-day 12% P25,000 note. The note and interest are payable at maturity date. 3. Ten (10) casual employees are paid every Saturday, their pay day, at P200 per hour and work eight hours per day from Monday to Saturday. Assume December 31, 2021 is a Thursday. 4. A company received a 6-month 14% P60,000 note dated November 1, 2021. The company has not recorded any interest yet on this note as of the end of 2021. 5. A company received its December 2021 bill from MERALCO for P12,300. The bill is to be paid on the first week of January 2022.
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
1. A company rents the ground floor of a building at P20,000 per month. As of December 31, the firm has not paid yet its rent for the last quarter of 2021.
2. A company issued on November 16, 2021 a 90-day 12% P25,000 note. The note and interest are payable at maturity date.
3. Ten (10) casual employees are paid every Saturday, their pay day, at P200 per hour and work eight hours per day from Monday to Saturday. Assume December 31, 2021 is a Thursday.
4. A company received a 6-month 14% P60,000 note dated November 1, 2021. The company has not recorded any interest yet on this note as of the end of 2021.
5. A company received its December 2021 bill from MERALCO for P12,300. The bill is to be paid on the first week of January 2022.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
