The following information is for Sandoval Company: Sandoval Company Balance Sheet December 31, 2021 Cash $ 25,000 Accounts Payable $ 60,000 Accounts Receivable 50,000 Salaries and Wages Payable 15,000 Prepaid Insurance 30,000 Mortgage Payable 85,000 Inventory 70,000 Total Liabilities 160,000 Land Held for Investment 85,000 Land 120,000 Buildings $100,000 Common Stock $120,000 Less Accumulated Retained Earnings 250,000 370,000 Depreciation (20,000) 80,000 Trademark 70,000 Total Liabilities and Total Assets $530,000 Stockholders’ Equity $530,000 The total dollar amount of liabilities to be classified as current liabilities is a $60,000. b $75,000. c $160,000. d $15,000.
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 following information is for Sandoval Company:
Sandoval Company
Balance Sheet
December 31, 2021
Cash $ 25,000 Accounts Payable $ 60,000
Prepaid Insurance 30,000 Mortgage Payable 85,000
Inventory 70,000 Total Liabilities 160,000
Land Held for Investment 85,000
Land 120,000
Buildings $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000 370,000
Trademark 70,000 Total Liabilities and
Total Assets $530,000
The total dollar amount of liabilities to be classified as current liabilities is
| a |
$60,000. |
|
| b |
$75,000. |
|
| c |
$160,000. |
|
| d |
$15,000. |
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