Unadjusted Adjusted Account Title Trial Balance Adjustments Trial Balance Income Statement Balance Sheet DR CR DR CR DR CR DR CR DR CR Cash Accounts Receivable 136,789 378,956 136,789 378,956 Allowance for Doubtful Accounts 16,782 21,145 37,927 Interest Receivable Note Receivable Merchandise Inventory 588 588 150,000 361,866 150,000 361,866 Prepaid Insurance Prepaid Rent Supplies Equipment Accumulated Depreciation - Equipment Accounts Payable Salaries & Wages Payable Unearned Revenue Interest Payable Utilities Payable Note Payable (final payment due 2023) Common Stock Retained Earnings Dividends Sales Consulting Revenue 60,000 10,000 50,000 20,000 30,000 10,000 44,277 46,777 400,000 2,500 75,000 51,709 150,000 51,709 70,000 75,000 70,000 24,000 2,000 22,000 1,575 1,575 7,000 350,000 270,600 7,000 350,000 270,600 424,500 424,500 120,000 120,000 4,050,864 35,933 4,050,864 2,000 37,933 Sales Returns and Allowances 300,000 300,000 Sales Discounts 100,000 1,950,000 1,200,000 100,000 1,950,000 1,270,000 75,000 21,145 10,000 Cost of Goods Sold Salaries & Wages Expense Depreciation Expense - Equipment Bad Debt Expense Insurance Expense Rent Expense Supplies Expense Utilities Expense Interest Revenue Interest Expense 70,000 75,000 21,145 10,000 10,000 44,277 7,000 10,000 44,277 65,000 58,000 588 588 1,575 241,584 1,575 5,540,972 | 5,540,973 5,299,388 5,299,388 241,585 Net Income
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.
Prepare the closing entries using the information attached.
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