The accounts listed below appeared in the December 31 trial balance of the Savard Theater. Debit Credit Equipment $192,000 Accumulated Depreciation—Equipment $ 60,000 Notes Payable 90,000 Admissions Revenue 380,000 Advertising Expense 13,680 Salaries and Wages Expense 57,600 Interest Expense 1,400 Instructions a. From the account balances listed above and the information given below, prepare the annual adjusting entries necessary on December 31. (Omit explanations.) 1. The equipment has an estimated life of 16 years and a salvage value of $24,000 at the end of that time. (Use straight-line method.) 2. The note payable is a 90-day note given to the bank October 20 and bearing interest at 8%. (Use 360 days for denominator.) 3. In December, 2,000 coupon admission books were sold at $30 each and recorded as Admissions Revenue. They could be used for admission any time after January 1. 4. Advertising expense paid in advance and included in Advertising Expense $1,100. 5. Salaries and wages accrued but unpaid $4,700. b. What amounts should be shown for each of the following on the income statement for the year? 1. Interest expense. 2. Admissions revenue. 3. Advertising expense. 4. Salaries and wages expense.
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.
The accounts listed below appeared in the December 31
| Debit | Credit | |||
| Equipment | $192,000 | |||
| $ 60,000 | ||||
| Notes Payable | 90,000 | |||
| Admissions Revenue | 380,000 | |||
| Advertising Expense | 13,680 | |||
| Salaries and Wages Expense | 57,600 | |||
| Interest Expense | 1,400 |
Instructions
a. From the account balances listed above and the information given below, prepare the annual
1. The equipment has an estimated life of 16 years and a salvage value of $24,000 at the end of that time. (Use straight-line method.)
2. The note payable is a 90-day note given to the bank October 20 and bearing interest at 8%. (Use 360 days for denominator.)
3. In December, 2,000 coupon admission books were sold at $30 each and recorded as Admissions Revenue. They could be used for admission any time after January 1.
4. Advertising expense paid in advance and included in Advertising Expense $1,100.
5. Salaries and wages accrued but unpaid $4,700.
b. What amounts should be shown for each of the following on the income statement for the year?
1. Interest expense.
2. Admissions revenue.
3. Advertising expense.
4. Salaries and wages expense.
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