The trial balance of Jim’s Landscaping before adjustment at 30 June 2019 is as follows: Jim’ Landscaping Trial Balance As at 30 June 2019 Account Debit ($) Credit ($) Cash 46,000 Accounts Receivable 48,000 Prepaid insurance 4,800 Landscaping Supplies 12,000 Equipment 25,000 Accumulated Depreciation - Equipment 4,800 Accounts Payable 35,000 Unearned Service Revenue 6,000 Sam L., Capital 50,500 Drawings 3,000 Service Revenue 58,000 Salaries Expense 13,000 Miscellaneous Expense 2,500 Total $ 153,500 $ 153,500 Additional information for the period: A physical count reveals $4,000 of landscaping supplies are on hand at the end of 30 June. The insurance was purchased on 1 May 2019, and it covers a period of 24 months. Unearned service revenue balance remained $4,400 at the end of the period. Salaries owed to employees are $3,600. Equipment is depreciated at a rate of 10% each year. Required: Prepare relevant adjusting entries. Ignore narrations.
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
|
Jim’ Landscaping Trial Balance As at 30 June 2019 |
||
|
Account |
Debit ($) |
Credit ($) |
|
Cash |
46,000 |
|
|
|
48,000 |
|
|
Prepaid insurance |
4,800 |
|
|
Landscaping Supplies |
12,000 |
|
|
Equipment |
25,000 |
|
|
|
|
4,800 |
|
Accounts Payable |
|
35,000 |
|
Unearned Service Revenue |
|
6,000 |
|
Sam L., Capital |
|
50,500 |
|
Drawings |
3,000 |
|
|
Service Revenue |
|
58,000 |
|
Salaries Expense |
13,000 |
|
|
Miscellaneous Expense |
2,500 |
|
|
Total |
$ 153,500 |
$ 153,500 |
Additional information for the period:
- A physical count reveals $4,000 of landscaping supplies are on hand at the end of 30 June.
- The insurance was purchased on 1 May 2019, and it covers a period of 24 months.
- Unearned service revenue balance remained $4,400 at the end of the period.
- Salaries owed to employees are $3,600.
- Equipment is
depreciated at a rate of 10% each year.
Required:
Prepare relevant
P.S.: This is not a graded question. I am doing this for my own practice.
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