REQUIRED: Prepare Columbus Ltd classified balance sheet at December 31, 2018. Prepare the closing entries. Prepare the post-closing trial balance. error_outlineGet 24/7 homework help and experts with bartleby learn. Subscribe now!arrow_forward Question The following trial balance was extracted from the books of Columbus Ltd at December 31, the end of the company’s financial year. The company is owned by John Columbus and is in the business of buying and farming supplies. Trial Balance as at December 31, 2018 Trial Balance A/C Name Debit Credit Cash 1,000,000 Accounts receivable 450,000 Allowance for bad debt 15,000 Merchandise Inventory 186,000 Store supplies 120,000 Prepaid Insurance 450,000 Furniture and fixtures 1,000,000 Accumulated depreciation – Furniture and Fixtures 360,000 Computer Equipment 600,000 Accumulated depreciation - Computer Equipment Accounts payable 320,000 Wages payable Unearned Sales revenue 150,000 Notes Payable, Long Term 900,000 John Columbus, Capital 2,200,000 John Columbus, Withdrawals 95,000 Sales revenue 1,761,000 Sales discount 120,000 Sales returns and allowances 95,000 Cost of goods sold 650,000 Wages Expense 450,000 Insurance Expense 180,000 Depreciation Expense – furniture and Fixtures Depreciation Expense – Computer Equipment Store Supplies Expense 40,000 Utilities Expense 180,000 Bad Debt Expense Interest Expense 90,000 Total 5,706,000 5,706,000
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.
REQUIRED: Prepare Columbus Ltd classified balance sheet at December 31, 2018. Prepare the closing entries. Prepare the post-closing trial balance.
The following trial balance was extracted from the books of Columbus Ltd at December 31, the end of the company’s financial year. The company is owned by John Columbus and is in the business of buying and farming supplies.
Trial Balance as at December 31, 2018
|
|
Trial Balance |
|
|
A/C Name |
Debit |
Credit |
|
Cash |
1,000,000 |
|
|
|
450,000 |
|
|
Allowance for |
|
15,000 |
|
Merchandise Inventory |
186,000 |
|
|
Store supplies |
120,000 |
|
|
Prepaid Insurance |
450,000 |
|
|
Furniture and fixtures |
1,000,000 |
|
|
|
|
360,000 |
|
Computer Equipment |
600,000 |
|
|
Accumulated depreciation - Computer Equipment |
|
|
|
Accounts payable |
|
320,000 |
|
Wages payable |
|
|
|
Unearned Sales revenue |
|
150,000 |
|
Notes Payable, Long Term |
|
900,000 |
|
John Columbus, Capital |
|
2,200,000 |
|
John Columbus, Withdrawals |
95,000 |
|
|
Sales revenue |
|
1,761,000 |
|
Sales discount |
120,000 |
|
|
Sales returns and allowances |
95,000 |
|
|
Cost of goods sold |
650,000 |
|
|
Wages Expense |
450,000 |
|
|
Insurance Expense |
180,000 |
|
|
Depreciation Expense – furniture and Fixtures |
|
|
|
Depreciation Expense – Computer Equipment |
|
|
|
Store Supplies Expense |
40,000 |
|
|
Utilities Expense |
180,000 |
|
|
Bad Debt Expense |
|
|
|
Interest Expense |
90,000 |
|
|
Total |
5,706,000 |
5,706,000 |
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