The adjusted trial balance for Chiara Company as of December 31 follows. Debit $ 64,800 52,000 19,200 171,000 16,000 168,000 146,000 88,000 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 Common stock Retained earnings Dividends Services revenue Interest revenue Depreciation pense-Automobiles Depreciation expense-Equipment Salaries expense Wages expense Interest expense Office supplies expense Advertising expense Repairs expense-Automobiles Totals 54,000 Credit $ 65,000 26,000 97,000 40,000 18,000 42,000 150,000 27,580 248, 220 474,000 34,000 27,000 21,500 190,000 42,000 38,000 33,600 64,500 26,200 $ 1,221,800 $ 1,221,800 Required: Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the tatement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was 248,220.]; 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.
![The adjusted trial balance for Chiara Company as of December 31 follows.
Debit
$ 64,800
52,000
19, 200
171,000
16,000
168,000
146,000
88,000
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
Common stock
Retained earnings
Dividends
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
54,000
27,000
21,500
190,000
42,000
38,000
Credit
$ 65,000
26,000
97,000
40,000
18,000
42,000
150,000
27,580
248, 220
474,000
34,000
33,600
64,500
26, 200
$ 1,221,800 $ 1,221,800
Required:
Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (b) the
tatement of retained earnings for the year ended December 31 [Note: Retained Earnings at December 31 of the prior year was
$248,220.]; and (c) the balance sheet as of December 31.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa574294-42d6-4d41-9486-3d8260db73f4%2F17fb89e7-7f9b-4f01-a563-f6d17f55b352%2Foeg42l4_processed.png&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
