The following accounts appear in the ledger of Celso and Company as of June 30, The end of the fiscal year Cash $1534 Accounts Receivable 13,810 Merchandise Inventory 50,280 Store Supplies 1,935 Prepaid Insurance1,385 Store Equipment 18,640 Accumulated Depreciation, Store Equipment 6,882 Accounts Payable10,065 B.E. Celso Capital 96,524 B.E. Celso Drawing30,000 Sales 208,030 Sales Returns and Allowances 1,740 Purchases 133,050 Purchases Returns And Allowances 4,295 Purchases Discounts 3,853 Freight In 8,350 Wages Expense 35,400 Advertising Expense 7,710 Rent Expense 12,000 The data for the adjustments on June 30 are as follows: a-b Merchandise Inventory, June 30, $54,600 c. Insurance expired for the year, $475 D. Depreciation for the year, $4,380 e. Accrued wages on June 30, $1,492 f. Supplies on hand at the end of the year, $100 Required 1. Prepare a work sheet for the fiscal year ended June 30. 2. Prepare an income statement. 3. Prepare a statement of owner's equity. No additional investments were made during the year. 4.Prepare a balance sheet. 5. Journalize the adjusting entries. 6. Journalize the closing entries. 7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry
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 following accounts appear in the ledger of Celso and Company as of June 30, The end of the fiscal year
Cash $1534
Merchandise Inventory 50,280
Store Supplies 1,935
Prepaid Insurance1,385
Store Equipment 18,640
Accounts Payable10,065
B.E. Celso Capital 96,524
B.E. Celso Drawing30,000
Sales 208,030
Sales Returns and Allowances 1,740
Purchases 133,050
Purchases Returns And Allowances 4,295
Purchases Discounts 3,853
Freight In 8,350
Wages Expense 35,400
Advertising Expense 7,710
Rent Expense 12,000
The data for the adjustments on June 30 are as follows:
a-b Merchandise Inventory, June 30, $54,600
c. Insurance expired for the year, $475
D. Depreciation for the year, $4,380
e. Accrued wages on June 30, $1,492
f. Supplies on hand at the end of the year, $100
Required
1. Prepare a work sheet for the fiscal year ended June 30.
2. Prepare an income statement.
3. Prepare a statement of owner's equity. No additional investments were made during the year.
4.Prepare a
5. Journalize the
6. Journalize the closing entries.
7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry
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