The fiscal year-end for Mason's Landscaping and Snow Removal is December 31. Record the adjusting entries for December 31, 2014. Assignment 1 - Adjusting Entries Hint: It is helpful to record the original transactions (or account balances) in your own rough notes as part of your analysis and calculations of year-end adjusting entries. T-accounts can be very useful for doing this. However, the only entries that should be recorded in the journal for this assignment are the December 31 adjusting entries. The accounts in Mason's ledger are: Bank Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Truck Accounts Payable Unearned Service Fees Bank Loan B. Mason, Capital B. Mason, Drawings Service Fees Earned Rent Expense Insurance Expense Supplies Expense Office Expense Maintenance Expense Truck Expense Interest Expense 1. On July 1, 2014, a customer signed a contract and agreed to pay $840 for 12 months of landscaping and snow removal services. 2. The balance in the Supplies account at the end of the year is $1200. A physical count of the supplies shows that there is $300 worth of supplies on December 31. 3. Mason paid $800 for six months of rent for a garage beginning October 1, 2014. The payment was made on October 1 as well. 4. A 12-month insurance policy was purchased on March 1, 2014 for $2400. 5. On April 1, 2014, a customer paid Mason $700 cash for 12 months of landscaping and snow removal services.
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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