Preparing Closing Journal Entries Selected financial information from General Mills as of May 29, 2016 follows. $ millions Debit Net sales Cost of sales Selling general, & administrative expense & other Interest expense, net Income tax expense Retained earnings Date 29-May 29-May Assume the company has not yet closed any accounts to retained earnings. Prepare journal entries to close the temporary accounts above. Set up the needed T-accounts, and post the closing entries. After these entries are posted, what is the balance of the retained earnings account (enter balance is T-account). General Journal Bal Bal Bal Bal Bal Bal Bal Ball # To close the revenue account. + • Description SG&A expense and other Interest expense, net Income tax expense To close the expense accounts. Net Sales Retained Earnings 10,780.4 16.797.1 Bal Bal. 3,119.9 Cost of Sales 12.084.4 Bal. SG&A Expense Interest Expense, net 350.6 Income Tax Expense 802.0 Bal $10,780.4 3.119.9 350.6 802.0 Debit Credit $16,797.1 12,084.4 Credit
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.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
