Sheffield's Graphics has a December 31 year end. Sheffield's Graphics records adjusting entries on an annual basis. The following information is available. 1. At the end of the year, the unadjusted balance in the Prepaid Insurance account was $2,950. Based on an analysis of the insurance policies, $2,550 had expired by year end. 2. At the end of the year, the unadjusted balance in the Unearned Revenue account was $1,750. During the last week of December, $380 of the related services were performed. 3. On July 1, 2024, Sheffield signed a one-year note payable for $9,000. The loan agreement stated that interest was 4%. 4. Depreciation for the computer and printing equipment was $1,900 for the year. 5. At the beginning of the year, Sheffield's had $700 of supplies on hand. During the year, $1,270 of supplies were purchased. A count at the end of the year indicated that $610 of supplies was left on December 31. 6. Between December 28 and December 31 inclusive (4 days), three employees worked eight-hour shifts at $13.25 per hour. The employees will be paid for this time worked on January 10. 7. On December 31, it was determined that $4,000 of services had been provided but the bookkeeper did not record it. Prepare the adjusting entries based on the above information. (Credit account titles are automatically indented when amount is entered.if no entry select no entry)
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.
Sheffield's Graphics has a December 31 year end. Sheffield's Graphics records
1. At the end of the year, the unadjusted balance in the Prepaid Insurance account was $2,950. Based on an analysis of the insurance policies, $2,550 had expired by year end.
2. At the end of the year, the unadjusted balance in the Unearned Revenue account was $1,750. During the last week of December, $380 of the related services were performed.
3. On July 1, 2024, Sheffield signed a one-year note payable for $9,000. The loan agreement stated that interest was 4%.
4. Depreciation for the computer and printing equipment was $1,900 for the year.
5. At the beginning of the year, Sheffield's had $700 of supplies on hand. During the year, $1,270 of supplies were purchased. A count at the end of the year indicated that $610 of supplies was left on December 31.
6. Between December 28 and December 31 inclusive (4 days), three employees worked eight-hour shifts at $13.25 per hour. The employees will be paid for this time worked on January 10.
7. On December 31, it was determined that $4,000 of services had been provided but the bookkeeper did not record it.
Prepare the adjusting entries based on the above information. (Credit account titles are automatically indented when amount is entered.if no entry select no entry)
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