The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2023. Account Title Debits Credits Cash $ 5,000 Accounts receivable 2,000 Inventory 5,000 Equipment 11,000 Accumulated depreciation $ 3,500 Accounts payable 3,000 Accrued liabilities 0 Common stock 10,000 Retained earnings 6,500 Sales revenue 0 Cost of goods sold 0 Salaries expense 0 Rent expense 0 Advertising expense 0 Dividends 0 Totals $ 23,000 $ 23,000 The following transactions occurred during January 2024: January 1 Sold inventory for cash, $3,500. The cost of the inventory was $2,000. The company uses the perpetual inventory system. January 2 Purchased equipment on account for $5,500 from the Strong Company. The full amount is due in 15 days. January 4 Received a $150 invoice from the local newspaper requesting payment for an advertisement that Whitlow placed in the paper on January 2. January 8 Sold inventory on account for $5,000. The cost of the inventory was $2,800. January 10 Purchased inventory on account for $9,500. January 13 Purchased equipment for cash, $800. January 16 Paid the entire amount due to the Strong Company. January 18 Received $4,000 from customers on account. January 20 Paid $800 to the owner of the building for January's rent. January 30 Paid employees $3,000 for salaries for the month of January. January 31 Paid a cash dividend of $1,000 to shareholders. Prepare general journal entries to record each transaction.
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 the post-closing
| Account Title | Debits | Credits |
|---|---|---|
| Cash | $ 5,000 | |
| 2,000 | ||
| Inventory | 5,000 | |
| Equipment | 11,000 | |
| $ 3,500 | ||
| Accounts payable | 3,000 | |
| Accrued liabilities | 0 | |
| Common stock | 10,000 | |
| 6,500 | ||
| Sales revenue | 0 | |
| Cost of goods sold | 0 | |
| Salaries expense | 0 | |
| Rent expense | 0 | |
| Advertising expense | 0 | |
| Dividends | 0 | |
| Totals | $ 23,000 | $ 23,000 |
The following transactions occurred during January 2024:
| January 1 | Sold inventory for cash, $3,500. The cost of the inventory was $2,000. The company uses the perpetual inventory system. |
|---|---|
| January 2 | Purchased equipment on account for $5,500 from the Strong Company. The full amount is due in 15 days. |
| January 4 | Received a $150 invoice from the local newspaper requesting payment for an advertisement that Whitlow placed in the paper on January 2. |
| January 8 | Sold inventory on account for $5,000. The cost of the inventory was $2,800. |
| January 10 | Purchased inventory on account for $9,500. |
| January 13 | Purchased equipment for cash, $800. |
| January 16 | Paid the entire amount due to the Strong Company. |
| January 18 | Received $4,000 from customers on account. |
| January 20 | Paid $800 to the owner of the building for January's rent. |
| January 30 | Paid employees $3,000 for salaries for the month of January. |
| January 31 | Paid a cash dividend of $1,000 to shareholders. |
Prepare general
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