The following are some of the accounts and their balances recorded in the Java Corp. Trial Balance. on December 31, 2019. Debit Credit Equipment $ 600,000 Prepaid Advertising 180,000 Salaries Expense 142,000 Interest Expense 8,200 Accumulated Depreciation – Equipment $ 200,000 Notes Payable 220,000 Concert Ticket Revenue 1,180,000 a) Based on the following adjustment data, please make the necessary adjusting entries as of December 31, 2019. The estimated economic life of the equipment is 10 years, has a residual value of $ 100,000 and is depreciated using the Straight Line method. Notes payable with a maturity of 180 days with a bearing interest of 8% were issued to obtain a cash loan from the bank on October 18, 2019. In December, the company sold 20,000 concert tickets at a price of $ 18 per ticket, for the concert to be held by PT Tok Tok in March 2019, initially recorded as revenue. Prepaid advertising is an advertising contract for 2 newspapers. Advertisements in newspaper X are published 2 times per month, in newspaper Y once per month. Contract Date total Many Publications newspaper X 1/11/2019 $ 240,000 24 times newspaper Y 1/10/2019 $ 144,000 12 times 5. The unpaid employee wages by the end of 2019 are $ 37,500. b) What is the balance value for each account below which is recorded in the Income Statement for 2019? Interest Expense Concert Ticket Revenue Prepaid Advertising Salaries Expense
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.
Task
The following are some of the accounts and their balances recorded in the Java Corp.
|
|
Debit |
Credit |
|
Equipment |
$ 600,000 |
|
|
Prepaid Advertising |
180,000 |
|
|
Salaries Expense |
142,000 |
|
|
Interest Expense |
8,200 |
|
|
|
|
$ 200,000 |
|
Notes Payable |
|
220,000 |
|
Concert Ticket Revenue |
|
1,180,000 |
a) Based on the following adjustment data, please make the necessary
- The estimated economic life of the equipment is 10 years, has a residual value of $ 100,000 and is
depreciated using the Straight Line method. - Notes payable with a maturity of 180 days with a bearing interest of 8% were issued to obtain a cash loan from the bank on October 18, 2019.
- In December, the company sold 20,000 concert tickets at a price of $ 18 per ticket, for the concert to be held by PT Tok Tok in March 2019, initially recorded as revenue.
- Prepaid advertising is an advertising contract for 2 newspapers. Advertisements in newspaper X are published 2 times per month, in newspaper Y once per month.
|
Contract |
Date |
total |
Many Publications |
|
newspaper X |
1/11/2019 |
$ 240,000 |
24 times |
|
newspaper Y |
1/10/2019 |
$ 144,000 |
12 times |
5. The unpaid employee wages by the end of 2019 are $ 37,500.
b) What is the balance value for each account below which is recorded in the Income Statement for 2019?
-
- Interest Expense
- Concert Ticket Revenue
- Prepaid Advertising
- Salaries Expense
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