The following information relates to year-end adjusting entries as of December 31, 2021. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,580. b. Six months' of the one-year insurance policy purchased on July 1 has expired. c. Four months of the one-year rental agreement purchased on September 1 has expired. d. Of the $1,800 of office supplies purchased on July 4, $250 remains. e. Interest expense on the $41,000 loan obtained from the city council on August 1 should be recorded. f. Of the $3,000 of racing supplies purchased on December 12, $110 remains. g. Suzie calculates that the company owes $13,500 in income taxes. General Journal General Statement of Income Statement Balance Sheet Requirement Trial Balance Ledger SE Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 30 31 32 33 34 35 36 37 ..... Prepare the closing entry for expenses. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31, 2021
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 information relates to year-end adjusting entries as of December 31, 2021.
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,580.
b. Six months' of the one-year insurance policy purchased on July 1 has expired.
c. Four months of the one-year rental agreement purchased on September 1 has expired.
d. Of the $1,800 of office supplies purchased on July 4, $250 remains.
e. Interest expense on the $41,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $3,000 of racing supplies purchased on December 12, $110 remains.
g. Suzie calculates that the company owes $13,500 in income taxes.
General
General
Statement of
Income
Statement
Requirement
Trial Balance
Balance Sheet
Journal
Ledger
SE
Prepare the journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field.)
View transaction list
Journal entry worksheet
30
31
32
33
34
35
36
37
Prepare the closing entry for expenses.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Dec 31, 2021](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe670ba8b-2e59-4ed5-9468-eab9a04d8c45%2F2e91e896-e9b7-4ed2-8211-084a4fed5979%2Fo86q7d_processed.jpeg&w=3840&q=75)
![1 Sell $14,500 of common stock to Suzie.
1 Sell $14,500 of common stock to Tony.
1 Purchase a one-year insurance policy for $5,160 ($430 per month) to cover injuries to participants during
outdoor clinics.
Jul.
Jul.
Jul.
Jul.
2 Pay legal fees of $1,600 associated with incorporation.
4 Purchase office supplies of $1,800 on account.
7 Pay for advertising of $380 to a local newspaper for an upcoming mountain biking clinic to be held on July 15.
Attendees will be charged $30 on the day of the clinic.
8 Purchase 10 mountain bikes, paying $18,400 cash.
Jul.
Jul.
Jul.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $1,800 from 60 bikers. Tony conducts the mountain
biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the
company receives $2,150.
Jul. 24 Pay $880 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on
August 10, and attendees can pay $110 in advance or $160 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $5,500 in advance from 50 kayakers for the upcoming kayak clinic.
Aug.
1 Great Adventures obtains a $41,000 low-interest loan for the company from the city council, which has recently
passed an initiative encouraging business development related to outdoor activities. The loan is due in three
years, and 6% annual interest is due each year on July 31.
4 The company purchases 14 kayaks, paying $19,500 cash.
Aug.
Aug. 10 Twenty additional kayakers pay $3,200 ($160 each), in addition to the $5,500 that was paid in advance on July
30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,200 cash.
Aug. 24 Office supplies of $1,800 purchased on July 4 are paid in full.
Sep.
1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one
year, paying $4,680 ($390 per month) in advance.
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,800 cash.
Oct. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an
altimeter, use a compass, and orient through heavily wooded areas. The company receives $18,100 cash.
1 Tony decides to hold the company's first adventure race on December 15. Four-person teams will race from
checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and
rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee
for each team is $550.
Dec.
5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $60 in
salary for each team that competes in the race. His salary will be paid after the race.
8 The company pays $1,300 to purchase a permit from a state park where the race will be held. The amount is
recorded as a miscellaneous expense.
Dec.
Dec.
Dec. 12 The company purchases racing supplies for $3,000 on account due in 30 days. Supplies include trophies for the
top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field
markers to prepare the racecourse.
Dec. 15 The company receives $22,000 cash from a total of forty teams, and the race is held.
Dec. 16 The company pays Victor's salary of $2,400.
Dec. 31 The company pays a dividend of $3,500 ($1,750 to Tony and $1,750 to Suzie).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe670ba8b-2e59-4ed5-9468-eab9a04d8c45%2F2e91e896-e9b7-4ed2-8211-084a4fed5979%2F8i1hywv_processed.jpeg&w=3840&q=75)
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