The following selected accounts and their current balances appear in the ledger of Maroon Co. for the fiscal year ended December 31, 2019. Accounts Payable 32,480 LT Note Payable 44,800 Misc. Administrative Accounts Receivable 96,800 1,280 Expense Misc. Selling Expense Office Equipment Office Salaries Expense Office Supplies Office Supplies Expense Paid-in Capital Prepaid Insurance Rent Expense Retained Earnings Salaries Payable Accum Depr- Office Equip Accum Depr - Store Equip Advertising Expense 10,240 1,280 27,360 68,000 35,040 67,320 Cash 123,000 4,480 Common Stock 75,000 1,040 52,000 Cost of Goods Sold Customer refunds Payable 620,000 12,000 2,720 25,080 Depr'Expense - Office Equip Depr Expense - Store Equip Dividends 10,160 301,600 5,120 1,920 28,000 3,120 Sales 992,000 Insurance Expense 138,560 Sales salaries Expense Store Equipment 'Interest Expense 4,000 122,400 Inventory 140,000 Maroon Co. has 10,000 shares of common stock authorized and 7,500 shares issued and outstanding with a par value $10. Others on your team prepared the income statement and the statement of stockholders' equity.
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.
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