The unadjusted trial balance of E. SANTOS COMPANY for December 31, 20A follows: Dr.Cr. CashP 504,000 Accounts Receivable 789,000 Prepaid Rent 144,000 Cooking Supplies 357,000 Land 530,000 Building 1,250,000 Accumulated Depreciation- BuildingP413,000 Cooking Equipment 870,000 Accumulated Depreciation- Cooking Equipment 212,000 Notes Payable1,400,000 Accounts Payable 117,000 Santos, Capital1,435,000 Santos , Withdrawals 240,000 Gourmet Cooking Revenues2,256,000 Salaries Expense 619,000 Travel Expense 127,000 Advertising Expense 215,000 Insurance Expense 40,000 Utilities Expense 102,000 Miscellaneous Expense 46,000 Additional Information: 1.One-half of the prepaid rent has expired. Cooking Supplies on hand at year-end amounted to P25,000. Depreciation on the building and on the cooking equipment amounted to P28,000 and P52,000, respectively. 4.Accrued salaries at year – end amounted to P27,000. Interest amounting to P252,000 has accrued on notes payable. Interest on the notes is paid every January 1. The note matures on January 1, 20B. REQUIRED: Record the adjusting entries in the General Journal. 8-column worksheet Income Statement
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 unadjusted
Dr.Cr.
CashP 504,000
Prepaid Rent 144,000
Cooking Supplies 357,000
Land 530,000
Building 1,250,000
Cooking Equipment 870,000
Accumulated Depreciation- Cooking Equipment 212,000
Notes Payable1,400,000
Accounts Payable 117,000
Santos, Capital1,435,000
Santos , Withdrawals 240,000
Gourmet Cooking Revenues2,256,000
Salaries Expense 619,000
Travel Expense 127,000
Advertising Expense 215,000
Insurance Expense 40,000
Utilities Expense 102,000
Miscellaneous Expense 46,000
Additional Information:
1.One-half of the prepaid rent has expired.
- Cooking Supplies on hand at year-end amounted to P25,000.
- Depreciation on the building and on the cooking equipment amounted to
P28,000 and P52,000, respectively.
4.Accrued salaries at year – end amounted to P27,000.
- Interest amounting to P252,000 has accrued on notes payable. Interest on
the notes is paid every January 1. The note matures on January 1, 20B.
REQUIRED:
- Record the
adjusting entries in the General Journal. - 8-column worksheet
- Income Statement
- Statement of Changes in Owner’s Equity
Balance Sheet - Closing Entries
- Post-Closing Trial Balance
- Opening Entry
- Reversing entries if necessary.
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