Presented below is the unadjusted trial balance of the Leah May Santiago Information Systems for the year ended Dec. 31, 2020: Leah May Santiago information Systems Unadjusted Trial Balance Dec. 31, 2020 Cash P 45,000 Notes Receivable 360,000 156,000 63,000 300,000 1,590,000 Accounts Receivable Office Supplies Land Building Accumulated Depreciation-Building Equipment Accumulated Depreciation-Equipment Accounts Payable Unearned Consulting Revenues Santiago, Capital, 1/1/2020 Santiago, Withdrawals Consulting Revenues Salaries Expense P 254,000 2,150,000 612,000 213,000 450,000 2,655,000 600,000 2,108,000 Repairs Expense Miscellaneous Expense 875,000 116,000 37,000 Totals P6,292,000 P6,292,000 Additional information: a. Office supplies on hand as at Dec. 31, 2020 is P21,000. b. One-third of the unearned revenues has been earned as at Dec. 31, 2020. Depreciation for the year amounted to P38,000 for the building and P123,000 for the equipment. C. d. Salaries in the amount of P14,000 have accrued at year-end. e. The notes receivable were accepted from several customers. The notes were issued on Sept. 1, 2020 and will be settled together with a 20% interest on Maw 31, 2021.
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 the worksheet of the attached information.
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