Record closing entries.
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.
![Required Information
On January 1, 2024, the general ledger of TNT Fireworks includes the following account balances:
Accounts
Cash
Accounts Receivable
Debit
$ 58,800
25,200
Credit
Allowance for Uncollectible Accounts
$ 2,300
Inventory
36,400
Notes Receivable (5%, due in 2 years)
13,200
Land
156,000
Accounts Payable
Common Stock
14,900
221,000
51,400
$ 289,600 $ 289,608
Retained Earnings
Totals
During January 2024, the following transactions occur.
January 1 Purchase equipment for $19,680. The company estimates a residual value of $1,600 and a six-year service
life.
January 4 Pay cash on accounts payable, $9,600.
January 8 Purchase additional inventory on account, $83,980.
January 15 Receive cash on accounts receivable, $22,100.
January 19 Pay cash for salaries, $29,980.
January 28 Pay cash for January utilities, $16,500.
January 38 Firework sales for January total $221,008. All of these sales are on account. The cost of the units sold is
$115,580.
Information for adjusting entries:
a. Depreciation on the equipment for the month of January is calculated using the straight-line method.
b. The company records an adjusting entry for $3,670 for estimated future uncollectible accounts.
c. The company has accrued interest on notes receivable for January.
d. Unpaid salaries owed to employees at the end of January are $32,700.
e. The company accrued income taxes at the end of January $9,100.
6. Record closing entries.
Note: If no entry is required for a particular transaction/event, select "No Journal Entry Required" In the first account field.
View transaction let
Journal entry worksheet
Record the entry to close the revenue accounts.
Note: Enter debits before credits.
Date
January 31, 2024
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F666a1c15-911e-4654-8498-639a26b6b6e5%2F75259581-943f-4310-82a6-af4a723f7cda%2F9bhay1n_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)