The adjusted trial balance for Chiara Company as of December 31 follows. Debit $ 148,500 53,500 19,600 Cash Accounts receivable Interest receivable Notes receivable (due in 90 days) Office supplies Automobiles Accumulated depreciation-Automobiles Equipment Accumulated depreciation-Equipment Land Accounts payable Interest payable Salaries payable Unearned revenue Long-term notes payable R. Chiara, Capital R. Chiara, Withdrawals i Services revenue Interest revenue Depreciation expense-Automobiles Depreciation expense-Equipment Salaries expense Wages expense Interest expense Office supplies expense Advertising expense Repairs expense-Automobiles Totals 168,500 16,500 171,000 142,000 80,000 54,000 26,000 19,500 187,000 Credit $ 55,000 18,000 92,000 30,000 16,000 42,000 150,000 315,800 534,000 30,000 39,000 35,800 35,000 58,500 28,400 $1,282,800 $1,282,800 Required: Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the statement of owner's equity for the year ended December 31 (Note: R. Chiara, Capital at December 31 of the prior year was $315,8 and there were no owner investments in the current year); and (c) the balance sheet as of December 31.
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.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
