Required information [The following information applies to the questions displayed below.] The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and Year 2. December 31 Cash Accounts receivable office supplies Office equipment Trucks Building Land Accounts payable Note payable Equity, December 31, Year 1 Year 1 $ 64,300 26,240 3,160 44,000 148,000 Equity, December 31, Year 2 0 0 3,500 0 2. Compute net income for Year 2 by comparing total equity amounts for these two years and using following information: During Year 2, the owner invested $35,000 additional cash in the business in exchange for common stock, and the company paid a $19,000 cash dividend. Year 2 $ 15,640 19,100 $ 1,960 44,000 157,000 80,000 60,000 33,500 40,000 0 0
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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![Required information
[The following information applies to the questions displayed below.]
The accounting records of Nettle Distribution show the following assets and liabilities
as of December 31 for Year 1 and Year 2.
December 31
Cash
Accounts receivable
office supplies
office equipment
Trucks
Building
Land
Accounts payable
Note payable
Equity, December 31, Year 1
Year 1
$ 64,300
26,240
3,160
44,000
148,000
Equity, December 31, Year 2
0
0
3,500
0
2. Compute net income for Year 2 by comparing total equity amounts for these two years and using the
following information: During Year 2, the owner invested $35,000 additional cash in the business in
exchange for common stock, and the company paid a $19,000 cash dividend.
Year 2
$ 15,640
19,100
1,960
44,000
157,000
80,000
60,000
33,500
40,000
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F649593ab-9161-4d6b-9fb8-86ec88815ee7%2Fcff3e5b4-4ddc-42b6-8273-441fa37ab987%2F521tpmb_processed.png&w=3840&q=75)
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