Question 1 Not complete Marked out of 1.00 P Flag question Trial Balance and Adjusting Entries Photomake, Inc., a commercial photography studio, has just completed its first full year of operations on December 31. The general ledger account balances before year- end adjustments follow. No adjusting entries have been made to the accounts at any time during the year. Assume that all balances are normal. $2.580 Accounts Payable Accounts Receivable 4,560 Unearned Photography Fees 3,120 15,120 Common Stock Cash $2,292 Prepaid Rent 28,800 Prepaid Insurance 3,564 Photography Fees Earned 41,376 13,200 4,104 Supplies 5,100 Wages Expense Equipment 27,360 Utilities Expense An analysis of the firm's records discloses the following items: been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. 1. Photography services of $1,110 have been rendered, but customers have not 2. The equipment, purchased January 1, has an estimated life of 10 years. 3. Utilities expense for December is estimated to be $480 but the bill will not arrive until January of next year. 4. The balance in Prepaid Rent represents the amount paid on January 1, for a 2 year lease on the studio. 5. In November, customers paid $3,120 in advance for pictures to be taken for the holiday season. When received, these fees were credited to Unearned Photography Fees. By December 31, all fees are earned. 6. A3 year insurance premium paid on January 1, was debited to Prepaid Insurance. 7. Supplies on hand at December 31 are $2,580 8. At December 31, wages expense of $450 has been incurred but not paid. Required a. Prove that the sum of the debits equals the sum of the credits for Photomake's unadjusted account balances by preparing an unadjusted trail balance as of December 31. PHOTOMAKE, Inc. ted Trial Bala nce de finitions
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.
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