The December 31, 2024, adjusted trial balance for Kline Enterprises was as follows: Account Title Debit Credit Accounts payable $ 94,000 Accounts receivable $ 174,000 Accumulated depreciation 264,000 Common stock 494,000 Cash 30,000 Cost of goods sold 484,000 Depreciation expense 64,000 Equipment 708,000 Interest expense 8,000 Inventory 154,000 Note payable (due in six months) 64,000 Rent expense 34,000 Retained earnings 70,000 Salaries payable 12,000 Sales revenue 782,000 Salaries expense 124,000 Totals $ 1,780,000 $ 1,780,000 Required: Assuming no income taxes, compute Kline's 12/31/2024 total current liabilities
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 December 31, 2024, adjusted
| Account Title | Debit | Credit |
|---|---|---|
| Accounts payable | $ 94,000 | |
| $ 174,000 | ||
| 264,000 | ||
| Common stock | 494,000 | |
| Cash | 30,000 | |
| Cost of goods sold | 484,000 | |
| Depreciation expense | 64,000 | |
| Equipment | 708,000 | |
| Interest expense | 8,000 | |
| Inventory | 154,000 | |
| Note payable (due in six months) | 64,000 | |
| Rent expense | 34,000 | |
| 70,000 | ||
| Salaries payable | 12,000 | |
| Sales revenue | 782,000 | |
| Salaries expense | 124,000 | |
| Totals | $ 1,780,000 | $ 1,780,000 |
Required:
Assuming no income taxes, compute Kline's 12/31/2024 total current liabilities
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