The work sheet for Babson's Seafood, a business owned by B. B. Babson, is provided. Year-end adjustments have been made and all required entries journalized and posted to the ledger accounts. Babson's Seafood Work Sheet (partial) For the year ended December 31, 20-- TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash 60,000 60,000 60,000 Accounts Receivable 36,000 36,000 36,000 Merchandise Inventory 50,000 60,000 s0.000 60,000 60,000 Supplies 23,200 16,000 7,200 7,200 Prepaid Insurance 9,000 4,000 5,000 5,000 Building 107,000 107,000 107,000 Accumulated Depreciation-Building 30,000 7,000 37,000 37,000 Equipment 70,000 70,000 70,000 Accumulated Depreciation-Equipment 28,000 6,000 34,000 34,000 Accounts Payable 32,200 32,200 32,200 Wages Payable 1,100 1,100 1,100 Unearned Revenue 16,000 11,000 5,000 5,000 Mortgage Payable 107.000 107.000 107,000 B. B. Babson, Capital 110,500 110,500 110,500 B. B. Babson, Drawing 40,000 40,000 40,000 Earned Revenue 11,000 11,000 11,000 Purchases 54,000 54,000 54,000 Purchases Returns and Allowances 6,400 6,400 6,400 Wages Expense 78,000 1,100 79,100 79,100 Supplies Expense 16,000 16,000 16,000 Depreciation Expense-Building 7,000 7,000 7,000 Depreciation Expense-Equipment 6,000 6,000 6,000 Insurance Expense 4,000 4,000 4,000 Utilities Expense 20,000 20,000 20,000 Miscellaneous Expense 7,400 7,400 7,400 558,100 558,100 155,100 155,100 247,000 632,200 632,200 305,400 385,200 326,800 Net Income 58,400 58,400 305,400 305,400 385,200 385,200 Required: Babson's Seafood Statement of Owner's Equity For the year ended December 31, 20-- Owner's Equity B. B. Babson, capital, January 1, 20-- Additional investment B. B. Babson, capital Less: Withdrawals for the year Increase in capital Total liabilities and owner's equity B. B. Babson, capital, December 31, 20--
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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