Reece Financial Services Co. Unadjusted Trial Balance July 31, 2018 Debit Credit Balances Balances Cash Accounts Receivable. 10,200 34,750 6,000 Prepaid Insurance Supplies Land Building. Accumulated Depreciation-Building. Equipment... Accumulated Depreciation-Equipment . Accounts Payable 1,725 50,000 155,750 62,850 45,000 17,650 3,750 Unearned Rent Common Stock Retained Earnings 3,600 60,000 93,550 Dividends Fees Earned. Salaries and Wages Expense. Utilities Expense Advertising Expense Repairs Expense.. Miscellaneous Expense 8,000 158,600 56,850 14,100 7,500 6,100 4,025 400,000 400,000
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.
Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted
The data needed to determine year-end adjustments are as follows:
•
• Depreciation of equipment for the year, $2,800.
• Accrued salaries and wages at July 31, $900.
• Unexpired insurance at July 31, $1,500.
• Fees earned but unbilled on July 31, $10,200.
• Supplies on hand at July 31, $615.
• Rent unearned at July 31, $300.
Instructions
1. Journalize the
Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation
Expense—Equipment; and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an
adjusted trial balance.
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