The trial balance of Jane Company shown below does not balance. JANE COMPANY Trial Balance June 30, 20X8 Debit Credit Cash P2,600 Accounts Receivable 7,600 Supplies 600 Equipment 8,300 Accounts Payable P9,766 Jane, Capital 1,952 Jane, Drawing 1,500 Service Revenue 15,200 Wages Expense 3,800 Repairs Expense 1,600 Total P26,000 P26,918 The following errors were revealed upon examination of the ledger and journal: Each of the above listed accounts has a normal balance per the general Cash of P360 received from a customer on account was debited to Cash P630 and credited to Accounts Receivable A withdrawal of P300 by the owner was posted as a credit to Jane, Drawing, P300 and credited to Cash P300. A debit of P300 was not posted to Wages The purchase of equipment on account for P700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for P700 Services were performed on account for a customer, P510, for which Accounts Receivable was debited P510 and Service Revenue was credited A payment on account for P225 was credited to Cash for P225 and credited to Accounts Payable for P252. Requirement: Prepare a correct trial balance for Jane Company with solution and computations
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.
TRY TO BALANCE
The
|
JANE COMPANY Trial Balance June 30, 20X8 |
||
|
|
Debit |
Credit |
|
Cash |
P2,600 |
|
|
|
7,600 |
|
|
Supplies |
600 |
|
|
Equipment |
8,300 |
|
|
Accounts Payable |
|
P9,766 |
|
Jane, Capital |
|
1,952 |
|
Jane, Drawing |
1,500 |
|
|
Service Revenue |
|
15,200 |
|
Wages Expense |
3,800 |
|
|
Repairs Expense |
1,600 |
|
|
Total |
P26,000 |
P26,918 |
The following errors were revealed upon examination of the ledger and journal:
- Each of the above listed accounts has a normal balance per the general
- Cash of P360 received from a customer on account was debited to Cash P630 and credited to Accounts Receivable
- A withdrawal of P300 by the owner was posted as a credit to Jane, Drawing, P300 and credited to Cash P300.
- A debit of P300 was not posted to Wages
- The purchase of equipment on account for P700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for P700
- Services were performed on account for a customer, P510, for which Accounts Receivable was debited P510 and Service Revenue was credited
- A payment on account for P225 was credited to Cash for P225 and credited to Accounts Payable for P252.
Requirement: Prepare a correct trial balance for Jane Company with solution and computations.
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