The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not balance: Ranger Co. UNADJUSTED TRIAL BALANCE August 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 77,000.00 2 Accounts Receivable 36,150.00 3 Prepaid insurance 10,100.00 4 Equipment 18,000.00 5 Accounts Payable 29,600.00 6 Unearned Rent 11,900.00 7 Common Stock 40,000.00 8 Retained Earnings 70,000.00 9 Dividends 12,000.00 10 Service Revenue 375,150.00 11 Wages Expense 218,300.00 12 Advertising Expense 16,100.00 13 Miscellaneous Expense 18,500.00 14 Totals 269,250.00 663,550.00 When the ledger and other records are reviewed, you discover the following: (1) the debits and credits in the cash account total $77,000 and $61,000, respectively; (2) a billing of $8,500 to a customer on account was not posted to the accounts receivable account; (3) a payment of $4,500 made to a creditor on account was not posted to the accounts payable account; (4) the balance of the unearned rent account is $5,400; (5) the correct balance of the equipment account is $180,000; and (6) each account has a normal balance. Prepare a corrected unadjusted trial balance. Unadjusted Trial Balance Prepare a corrected unadjusted trial balance. Ranger Co. UNADJUSTED TRIAL BALANCE August 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Prepaid insurance 4 Equipment 5 Accounts Payable 6 Unearned Rent 7 Common Stock 8 Retained Earnings 9 Dividends 10 Service Revenue 11 Wages Expense 12 Advertising Expense 13 Miscellaneous Expense 14 Totals
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.
| ACCOUNT TITLE | DEBIT | CREDIT | |
|---|---|---|---|
|
1
|
Cash
|
77,000.00
|
|
|
2
|
|
36,150.00
|
|
|
3
|
Prepaid insurance
|
|
10,100.00
|
|
4
|
Equipment
|
18,000.00
|
|
|
5
|
Accounts Payable
|
|
29,600.00
|
|
6
|
Unearned Rent
|
|
11,900.00
|
|
7
|
Common Stock
|
40,000.00
|
|
|
8
|
|
70,000.00
|
|
|
9
|
Dividends
|
12,000.00
|
|
|
10
|
Service Revenue
|
|
375,150.00
|
|
11
|
Wages Expense
|
|
218,300.00
|
|
12
|
Advertising Expense
|
16,100.00
|
|
|
13
|
Miscellaneous Expense
|
|
18,500.00
|
|
14
|
Totals
|
269,250.00
|
663,550.00
|
| ACCOUNT TITLE | DEBIT | CREDIT | |
|---|---|---|---|
|
1
|
Cash
|
|
|
|
2
|
Accounts Receivable
|
|
|
|
3
|
Prepaid insurance
|
|
|
|
4
|
Equipment
|
|
|
|
5
|
Accounts Payable
|
|
|
|
6
|
Unearned Rent
|
|
|
|
7
|
Common Stock
|
|
|
|
8
|
Retained Earnings
|
|
|
|
9
|
Dividends
|
|
|
|
10
|
Service Revenue
|
|
|
|
11
|
Wages Expense
|
|
|
|
12
|
Advertising Expense
|
|
|
|
13
|
Miscellaneous Expense
|
|
|
|
14
|
Totals
|
|
|
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