The trial balance of Windsor Fashion Center contained the following accounts at November 30, the end of the company’s fiscal year. WINDSOR FASHION CENTER TRIAL BALANCE NOVEMBER 30, 2020 Debit Credit Cash $33,050 Accounts Receivable 36,910 Inventory 48,210 Supplies 8,710 Equipment 139,420 Accumulated Depreciation-Equipment $26,280 Notes Payable 54,210 Accounts Payable 51,710 Common Stock 93,210 Retained Earnings 11,210 Sales Revenue 764,760 Sales Returns and Allowances 4,200 Cost of Goods Sold 495,400 Salaries and Wages Expense 138,720 Advertising Expense 27,540 Utilities Expenses 15,280 Maintenance and Repairs Expense 12,100 Delivery Expense 16,700 Rent Expense 25,140 Totals $1,001,380 $1,001,380 Adjustment data: 1. Supplies on hand totaled $4,710. 2. Depreciation is $16,710 on the equipment. 3. Interest of $11,530 is accrued on notes payable at November 30. Other data: 1. Salaries expense is 70% selling and 30% administrative. 2. Rent expense and utilities expenses are 80% selling and 20% administrative. 3. $30,000 of notes payable are due for payment next year. 4. Maintenance and repairs expense is 100% administrative.
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
|
WINDSOR FASHION CENTER |
||||||
|
Debit |
Credit |
|||||
| Cash | $33,050 | |||||
| 36,910 | ||||||
| Inventory | 48,210 | |||||
| Supplies | 8,710 | |||||
| Equipment | 139,420 | |||||
| $26,280 | ||||||
| Notes Payable | 54,210 | |||||
| Accounts Payable | 51,710 | |||||
| Common Stock | 93,210 | |||||
| 11,210 | ||||||
| Sales Revenue | 764,760 | |||||
| Sales Returns and Allowances | 4,200 | |||||
| Cost of Goods Sold | 495,400 | |||||
| Salaries and Wages Expense | 138,720 | |||||
| Advertising Expense | 27,540 | |||||
| Utilities Expenses | 15,280 | |||||
| Maintenance and Repairs Expense | 12,100 | |||||
| Delivery Expense | 16,700 | |||||
| Rent Expense | 25,140 | |||||
| Totals |
$1,001,380 |
$1,001,380 |
Adjustment data:
| 1. | Supplies on hand totaled $4,710. | |
| 2. | Depreciation is $16,710 on the equipment. | |
| 3. | Interest of $11,530 is accrued on notes payable at November 30. |
Other data:
| 1. | Salaries expense is 70% selling and 30% administrative. | |
| 2. | Rent expense and utilities expenses are 80% selling and 20% administrative. | |
| 3. | $30,000 of notes payable are due for payment next year. | |
| 4. |
Maintenance and repairs expense is 100% administrative. |
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