The December 31, 2024, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Cash Accounts receivable Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Notes payable (due in six months) Salaries payable Interest payable Common stock Retained earnings Sales revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Advertising expense Totals Debits $ 68,500 250,000 5,000 35,000 450,000 360,000 90,000 15,000 45,000 Credits $ 190,000 40,000 15,000 6,000 500 400,000 70,000 600,000 1,000 2,000 $ 1,321,500 $ 1,321,500 Required: 1-a. Prepare an income statement for the year ended December 31, 2024. 1-b. Prepare a classified balance sheet as of December 31, 2024. 2. Prepare the necessary closing entries on December 31, 2024.
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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![Exercise 2-12 (Algo) Financial statements and closing entries [LO2-7, 2-8]
The December 31, 2024, adjusted trial balance for the Blueboy Cheese Corporation is presented below.
Account Title
Cash
Accounts receivable.
Prepaid rent
Inventory
Office equipment
Accumulated depreciation
Accounts payable
Notes payable (due in six months)
Salaries payable
Interest payable
Common stock
Retained earnings
Sales revenue
Cost of goods sold
Salaries expense.
Rent expense
Depreciation expense
Interest expense
Advertising expense
Totals
Req 1A
Req 1B
Required:
1-a. Prepare an income statement for the year ended December 31, 2024.
1-b. Prepare a classified balance sheet as of December 31, 2024.
2. Prepare the necessary closing entries on December 31, 2024.
BLUEBOY CHEESE CORPORATION
Income Statement
For the Year Ended December 31, 2024
Operating expenses:
Complete this question by entering your answers in the tabs below.
Req 2
Total operating expenses
Other expense:
Debits
Prepare an income statement for the year ended December 31, 2024.
$ 68,500
250,000
5,000
35,000
450,000
< Req 1A
Credits
$ 190,000
40,000
15,000
6,000
500
400,000
70,000
600,000
360,000
90,000
15,000
45,000
1,000
2,000
$ 1,321,500 $ 1,321,500
Req 1B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d5fb871-3402-4837-b130-c544d601a10a%2F5d5de1d3-4bc6-472e-b5b6-1f3d96d4ca58%2Faovh6yp_processed.png&w=3840&q=75)
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