The December 31, 2021, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2021) follows. Number 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 Office equipment 164 Accumulated depreciation-Office equipment Computer equipment 167 168 Accumulated depreciation-Computer equipment 201 210 236 301 302 403 Computer services revenue 612 613 623 637 640 652 655 676 677 684 901 Account Title Accounts payable Wages payable Unearned computer services revenue S. Rey, Capital S. Rey, Withdrawals Depreciation expense-Office equipment Depreciation expense-Computer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Miscellaneous expenses Repairs expense-Computer Income summary Totals Debit $ 48,372 5,668 580 1,665 825 8,000 3. Prepare a classified balance sheet as of December 31, 2021. 4. Record the closing entries as of December 31, 2021. 5. Prepare a post-closing trial balance as of December 31, 2021. 20,000 7,100 400 1,250 3,875 555 2,475 3,065 2,753 896 250 1,305 $ 109,034 Credit $ 400 1,250 1,100 500 1,500 73,000 31,284 0 $ 109,034 Required: 1. Prepare an income statement for the three months ended December 31, 2021. 2. Prepare a statement of owner's equity for the three months ended December 31, 2021. Hint: The S. Rey, Capital account balance was $0 on October 1, and owner investments were $73,000 this period.
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 2 steps with 5 images
