Required: - general ledger
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.
![Problemt No. 1- Fallen Moon Legal Services
Below are the details from the books of Fallen Moon Legal Service.
FALLEN MOON Legal Service
Owned and Operated by John Lloyd Cruz
Unadjusted Trial Balance
December 31, 20x0
Acct No.
Account title
Debit
Credit
101
Cash
78,400
8,900
2,500
102
Accounts Receivable
106
Office Supplies
6,000
Prepaid Insurance
Furniture and Equipment
Accounts Payable
Loan Payable
John Lloyd Cruz, Capital
John Lloyd Cruz, Drawing
105
108
75,000
30,000
60,000
201
205
60,000
301
12,000
302
44,400
Legal Fees
Salary Expense
Advertising Expense
Utilities Expense
Miscellaneous Expense
401
5,500
3,600
1,500
1,000
501
503
504
509
194,400
194,400
Total
The expanded chart of Accounts Listed below will be used as reference:
Acct No.
Account title
Acct No.
Account title
101
Cash
401
Legal Fees
Salary Expense
Rent Expense
Advertising Expense
Utilities Expense
Insurance Expense
Supplies Expense
Depreciation Expense
Miscellaneous Expense
Interest Expense
102
Accounts Receivable
501
Prepaid Advertising
Prepaid Insurance
Office Supplies
Furniture and Equipment
Accumulated Depreciation
Accounts Payable
Accrued Rent Expense
104
502
105
503
106
504
108
505
109
506
201
507
202
509
Accrued Interest Expense
Unearned Legal Fees
Loans Payable
John Lloyd Cruz, Capital
John Lloyd Cruz, Drawing
203
510
204
205
301
302
Total
Additional Information
1. The one year P6,000 insurance paid and effectivity was on December 1, 20x0.
2. Office Rental of P4,000 for the month of December 20x0 was still unpaid.
3. Interest of 18% per annum on the P60,000 bank loan granted on December 11,
20x0 has accrued.
4. Advertising placement of P3,600 for three (3) months was effective on December 1.
20x0.
5. Fees of P5,000 collected in advance on December 30 will be for services to be
rendered next year.
6. Office Supplies unused at the end of the month amounted to Pl,600
7. Furniture and Equipment are estimated to have a useful life of ten years. It was
decided to provide depreciation for December 20x0.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F47c0d26e-05a5-4006-81ee-2f375cdc0693%2Fc49fe08a-6f07-4593-b2ea-83ef478f853a%2F9memi2c_processed.jpeg&w=3840&q=75)
![Requirement No. 2 POSTING TO GENERAL LEDGER
Instruction : Post the Adjusting Entries made (at requirement no. 1) and compute the
ending balance of ench and every account (whether the account has an adjustment or
none)
Salaries Expense - 501
5,500
CASH - 101
78,400
Accounts Receivable - 102
8,900
Rent Expense - 502
Prepaid Advertising - 104
Prepaid insurance - 105
Advertising Expense - 503
3,600
6,000
Office Supplies- 106
2.500
Fumiture andEquipment - 108
75,000
Utilities Expense - 504
1,500
Insurance Expense - 505
Accumulated Depreciation - 109
Account Payable- 201
30,000
Depreciation Expense - 507
Supplies Expense - 506
Accrued Rent Expense - 202
Accrued Interest Expense - 203
Interest Expense - 510
Miscellaneous Expense - 509
1,000
Uneamed Legal Fees-204
Loans Puyable - 20s
60,000
John Lloyd Cruz, Capital - 301
60,000
John Lloyd Cruz, Drawing- 302
12,000
Legal Tee's 401
44,400
Format](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F47c0d26e-05a5-4006-81ee-2f375cdc0693%2Fc49fe08a-6f07-4593-b2ea-83ef478f853a%2Fold9dbi_processed.jpeg&w=3840&q=75)
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