The amounts of the assets and liabilities of Excalibur Travel Agency at December 31, 20Y5, the end of the year, and its revenue and expenses for the year follow. The capital of James Brewster, owner, was $665,000 on January 1, 20Y5, the beginning of the year. During the year, James withdrew $41,000. Accounts Amounts Accounts payable $68,500 Accounts receivable 274,000 Cash 187,500 Fees earned 899,200 Land 544,000 Miscellaneous expense 6,500 Rent expense 40,000 Supplies 5,300 Supplies expense 4,400 Utilities expense 27,000 Wages expense 503,000 Required: 1. Prepare an income statement for the year ended December 31, 20Y5.* 2. Prepare a statement of owner’s equity for the year ended December 31, 20Y5.* 3. Prepare a balance sheet as of December 31, 20Y5.* 4. What item appears on both the statement of owner’s equity and the balance sheet? *Be sure to complete the statement heading. Refer to the information given and the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Labels December 31, 20Y5 Expenses For the Year Ended December 31, 20Y5 Amount Descriptions Decrease in owner’s equity James Brewster, capital James Brewster, capital, December 31, 20Y5 James Brewster, capital, January 1, 20Y5 Increase in owner’s equity Investment on July 1, 20Y5 Net income Net loss Total assets Total expenses Total liabilities and owner’s equity Withdrawals 1. Prepare an income statement for the year ended December 31, 20Y5. Be sure to complete the statement heading. Refer to the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. A colon (:) will automatically appear if it is required. Excalibur Travel Agency Income Statement
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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Accounts
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Amounts
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| Accounts payable | $68,500 |
| 274,000 | |
| Cash | 187,500 |
| Fees earned | 899,200 |
| Land | 544,000 |
| Miscellaneous expense | 6,500 |
| Rent expense | 40,000 |
| Supplies | 5,300 |
| Supplies expense | 4,400 |
| Utilities expense | 27,000 |
| Wages expense | 503,000 |
| Required: | |||
| 1. | Prepare an income statement for the year ended December 31, 20Y5.* | ||
| 2. | Prepare a statement of owner’s equity for the year ended December 31, 20Y5.* | ||
| 3. | Prepare a |
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| 4. | What item appears on both the statement of owner’s equity and the balance sheet?
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| Labels | |
| December 31, 20Y5 | |
| Expenses | |
| For the Year Ended December 31, 20Y5 | |
| Amount Descriptions | |
| Decrease in owner’s equity | |
| James Brewster, capital | |
| James Brewster, capital, December 31, 20Y5 | |
| James Brewster, capital, January 1, 20Y5 | |
| Increase in owner’s equity | |
| Investment on July 1, 20Y5 | |
| Net income | |
| Net loss | |
| Total assets | |
| Total expenses | |
| Total liabilities and owner’s equity | |
| Withdrawals |
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Excalibur Travel Agency
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Income Statement
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Excalibur Travel Agency
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Statement of Owner’s Equity
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