SOR: Problem #4 worksheet Preparation The May 31, 2020 trial balance for lly Abella Surveyors is presented as follows: Ily Abella Surveyors Trial Balance May 31, 2020 Cash Accounts Receivable P 210,000 Prepaid Advertising Engineering Supplies Survey Equipment Accum. Depreciation-Survey Equipt. Accounts Payable Unearned Survey Revenues Notes Payable Abella, Capital Abella, Withdrawals Survey Revenues Salaries Expense 930,000 360,000 270,000 1,890,000 P 640,000 190,000 120,000 500,000 1,120,000 700,000 6,510,000 3,270,000 Rent Expense Insurance Expense Utilities Expense 960,000 250,000 160,000 80,000 P9,080,000 Miscellaneous Expense Totals P9,080,000 The following information pertaining to the year-end adjustments is available: a. The P360,000 prepaid advertising represents expenditure made on Nov. 1, 2019 for monthly advertising over the next 18 months. D. A count of the engineering supplies at May 31, 2020 amounted to P90,000. C. Depreciation on the surveying equipment amounted to P160,000. d. One-third of the unearned survey revenues has been earned at year-end. . At year-end, salaries in the amount of P140,000 have accrued. . Interest of P60,000 on the notes payable has accrued at year-end. Required: Prepare the adjustments on the worksheet and complete the worksheet.
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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