Safety-First Company completed all of its October 31, 2020, adjustments in preparation for preparing its financial statements, which resulted in the following trial balance. Account Balance Accounts payable $ 11,420 Accounts receivable 20,000 Accumulated depreciation, building 79,400 Accumulated depreciation, equipment 37,600 Accumulated depreciation, furniture 21,100 Allowance for doubtful accounts 900 Building 136,600 Cash 11,200 Equipment 90,400 Expenses, including the cost of goods sold 761,400 Furniture 50,700 Land 105,700 Merchandise inventory 35,300 Note payable 85,900 Sales 904,180 Tarifa Sharma, capital 62,680 Unearned revenues 8,120 Other information: All accounts have normal balances. $26,600 of the note payable balance is due by October 31, 2021. The final task in the year-end process was to assess the assets for impairment, which resulted in the following schedule. Asset Recoverable Value Land $ 136,600 Building 105,800 Equipment 28,800 Furniture 15,600 Required: 1. Prepare the entry (entries) to record any impairment losses on October 31, 2020. Assume the company recorded no impairment losses in previous years. (Hint: If no entry is required for a transaction, use "No journal entry required" in the first account field.) Oct 31, 2020: Record Impairment loss on equipment. Oct 31, 2020: Record Impairment loss on furniture. Oct 31, 2020: Record Impairment loss on Land. Oct 31, 2020: Record Impairment loss on Building.
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.
Safety-First Company completed all of its October 31, 2020, adjustments in preparation for preparing its financial statements, which resulted in the following
| Account | Balance | ||
| Accounts payable | $ | 11,420 | |
| 20,000 | |||
| 79,400 | |||
| Accumulated depreciation, equipment | 37,600 | ||
| Accumulated depreciation, furniture | 21,100 | ||
| Allowance for doubtful accounts | 900 | ||
| Building | 136,600 | ||
| Cash | 11,200 | ||
| Equipment | 90,400 | ||
| Expenses, including the cost of goods sold | 761,400 | ||
| Furniture | 50,700 | ||
| Land | 105,700 | ||
| Merchandise inventory | 35,300 | ||
| Note payable | 85,900 | ||
| Sales | 904,180 | ||
| Tarifa Sharma, capital | 62,680 | ||
| Unearned revenues | 8,120 | ||
Other information:
- All accounts have normal balances.
- $26,600 of the note payable balance is due by October 31, 2021.
The final task in the year-end process was to assess the assets for impairment, which resulted in the following schedule.
| Asset | Recoverable Value | ||
| Land | $ | 136,600 | |
| Building | 105,800 | ||
| Equipment | 28,800 | ||
| Furniture | 15,600 | ||
Required:
1. Prepare the entry (entries) to record any impairment losses on October 31, 2020. Assume the company recorded no impairment losses in previous years. (Hint: If no entry is required for a transaction, use "No
Oct 31, 2020: Record Impairment loss on equipment.
Oct 31, 2020: Record Impairment loss on furniture.
Oct 31, 2020: Record Impairment loss on Land.
Oct 31, 2020: Record Impairment loss on Building.
(Second part of question posted as a different question)
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