Valerie Insurance Agency Work Sheet For Year Ended December 31, 20- Trial Balance Adjustments Adjusted Trial Balance Income Stateme nt Balance Sheet Account Name Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 7,532 Cash 7,532 7,532 Office Supplies 315 (c) 240 75 240 Office Equipment 2,398 2,398 2,398 Accum. Depr., Office Equipment M. Valerie, Capital 420 (a) 420 840 840 18,614 18,614 18,614 M.Valerie, Drawing 18,000 18,000 18,000 Premiums Eamed 33,400 33,400 33,400 Wages Expense Rent Expense 20,500 (b) 428 20,928 20,928 2,200 2,200 2,200 Telephone Expense 736 736 736 Advertising Expense Miscellaneous Expense 645 645 645 108 108 108 52,434 52,434 Office Supplies Expense (c) 75 75 75 Depr. Exp., Office Equipment (a) 420 420 420 428 Wages Payable (b) 428 923 923 53,282 52,854 25,112 33,400 28,170 19,882 8,288 33,400 Net Income 8,288 33,400 28,170 28,170
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.
For additional help, see the demonstration problem at the beginning of each chapter in your Working Papers.
The completed worksheet for Valerie Insurance Agency as of December 31 is presented in your Working Papers or in CengageNow, along with the general ledger as of December 31 before adjustments.
Check Figure
Post-closing
Required
1. Write the name of the owner, M. Valerie, in the Capital and Drawing accounts.
2. Write the balances from the unadjusted trial balance in the general ledger.
3. Journalize and post the
4. Journalize and
5. Prepare a post-closing trial balance.
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