Reliable Movers had the following account balances, in random order, on December 15, 2002 (all accounts have their “normal” balances): Moving fees earned.................. $ 87,200 Cash............................................ $ 2,400 Accounts receivable ................. 5,800 Storage fees earned .................. 19,300 Rent expense ............................. 15,700 Notes receivable........................ 15,000 R. Sprott, Capital ...................... 50,000 Utilities expense........................ 800 Office supplies expense ........... 700 Office supplies .......................... 3,200 Mortgage payable..................... 13,000 Accounts payable ..................... 11,000 Salaries expense........................ 53,700 Office equipment ...................... 4,100 Insurance expense .................... 2,100 Moving equipment................... 77,400 The following events took place during the final days of the year: Dec. 16The accountant discovered that an error had been made in posting an entry to the Moving Fees Earned account. The entry was correctly journalized but $1,200 was accidentally posted as $2,100 in the account. 17 Moved a customer’s goods to Reliable’s rented warehouse for storage. The moving fees were $1,000. Storage fees are $200 per month and are due from the customer in 30 days. 18 Collected a $5,000 note owed to Reliable Movers and collected interest of $600. 21 Purchased storage racks for $4,000. Paid $1,200, provided moving services for $500, and promised to pay the balance in 60 days. 23 Collected $1,000; $750 of this was for moving goods on December 15 (recorded as an accounts receivable at that time) and the balance was for storage fees for the period of December 16 to 23. 24 Reliable Movers paid $6,000 owing on the mortgage. 27 Réal Sprott withdrew $2,000 for personal use. 29 Provided moving services to a lawyer for $800. The lawyer paid Reliable Movers $500 and provided legal work for the balance Page 7|9 Dec. 31 Réal Sprott, the owner of Reliable Movers, sold 1,000 shares he held in Whitehorse Haulage Inc. for $4,000. Required Where appropriate, record each transaction from December 16 to 31 in the journal. Explanations are not required
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.
Reliable Movers had the following account balances, in random order, on December 15, 2002 (all accounts have their “normal” balances):
Moving fees earned.................. $ 87,200 Cash............................................ $ 2,400
Office supplies expense ........... 700 Office supplies .......................... 3,200 Mortgage payable..................... 13,000 Accounts payable ..................... 11,000 Salaries expense........................ 53,700 Office equipment ...................... 4,100 Insurance expense .................... 2,100 Moving equipment................... 77,400 The following events took place during the final days of the year:
Dec. 16The accountant discovered that an error had been made in
17 Moved a customer’s goods to Reliable’s rented warehouse for storage. The moving fees were $1,000. Storage fees are $200 per month and are due from the customer in 30 days.
18 Collected a $5,000 note owed to Reliable Movers and collected interest of $600.
21 Purchased storage racks for $4,000. Paid $1,200, provided moving services for $500, and promised to pay the balance in 60 days.
23 Collected $1,000; $750 of this was for moving goods on December 15 (recorded as an accounts receivable at that time) and the balance was for storage fees for the period of December 16 to 23.
24 Reliable Movers paid $6,000 owing on the mortgage. 27 Réal Sprott withdrew $2,000 for personal use.
29 Provided moving services to a lawyer for $800. The lawyer paid Reliable Movers $500 and provided legal work for the balance
Page 7|9
Dec. 31 Réal Sprott, the owner of Reliable Movers, sold 1,000 shares he held in Whitehorse Haulage Inc. for $4,000.
Required Where appropriate, record each transaction from December 16 to 31 in the journal. Explanations are not required
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