The following is Lily Shoes Limited’s unadjusted trial balance at its year-end, November 30, 2021. Additional information: 1. A count as of November 30 showed that merchandise inventory on hand amounted to $517,840. 2. Store supplies used during the period amounted to $62,342. 3. Remaining office supplies at year-end amounted to $3,271. 4. The prepaid rent was paid on August 1, 2021 and is good of a 12-month period. 5. The store equipment has a residual value of $15,000, and a useful life of 6 years. 6. Furniture & Fixtures was bought on June 1 of the current year and has a useful life of 8 years. 7. The delivery van has a salvage value of $44,000 and a useful life of 12 years. 8. Salaries accrued at the end of the period amounted to $64,800. 9. The Note Payable has an interest rate of 9%. Interest payments are made every December 1. Prepare the following: 1. Adjusting and closing entries for the year. 2. Worksheet for the year ended, November 30, 2021. 3. Income Statement as of November 30, 2021. 4. Statement of Changes in Owner’s Equity 5. Balance Sheet as of November 30, 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 is Lily Shoes Limited’s unadjusted
Additional information:
1. A count as of November 30 showed that merchandise inventory on hand amounted to $517,840.
2. Store supplies used during the period amounted to $62,342.
3. Remaining office supplies at year-end amounted to $3,271.
4. The prepaid rent was paid on August 1, 2021 and is good of a 12-month period.
5. The store equipment has a residual value of $15,000, and a useful life of 6 years.
6. Furniture & Fixtures was bought on June 1 of the current year and has a useful life of 8 years.
7. The delivery van has a salvage value of $44,000 and a useful life of 12 years.
8. Salaries accrued at the end of the period amounted to $64,800.
9. The Note Payable has an interest rate of 9%. Interest payments are made every December 1.
Prepare the following:
1. Adjusting and closing entries for the year.
2. Worksheet for the year ended, November 30, 2021.
3. Income Statement as of November 30, 2021.
4. Statement of Changes in Owner’s Equity
5. Balance Sheet as of November 30, 2021.
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