Valerie's & Christopher, a large marketing firm, adjust in accounts at the end of each months. The following information is avalable for the year ending in December 31 1. A bank loan had been obtained on December 1,. Accrued interest on the loan at December 31, amounts to &1,50. Not interest expense has yet been recorded. 2. Depresication of the firm's office building in base on an estimatd life of 30 years, The building was purchased 4 years ago for $450,00 3. Accrued, but unbilled, revenue during during December amounts to $75,000. 4.On March 1 the firm paid $2,4000 to renew a 12 month insurance policy. The entire amount was recorded as prepaid insurance. 5. the received $15,00 from King Biscuit Company in abvance developing a six month marketing campaing. The entire amount was intitially recorde as unearned revenue. A tDecember 31,$9,000 ha actually been eatned by the firm. 6. The company's policy is to paid its employment every Friday. Since December 31, fell on a wednesday , there was accrued liability fo salaries amountingg to $1,9000. a. record the necessary adjusting jounal entries on December 31. b. By how much di Valerie & Christopher, net income increse or decrease as a result of the adjustin entries performed in part a.(ignore income taxes)
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.
Valerie's & Christopher, a large marketing firm, adjust in accounts at the end of each months. The following information is avalable for the year ending in December 31
1. A bank loan had been obtained on December 1,. Accrued interest on the loan at December 31, amounts to &1,50. Not interest expense has yet been recorded.
2. Depresication of the firm's office building in base on an estimatd life of 30 years, The building was purchased 4 years ago for $450,00
3. Accrued, but unbilled, revenue during during December amounts to $75,000.
4.On March 1 the firm paid $2,4000 to renew a 12 month insurance policy. The entire amount was recorded as prepaid insurance.
5. the received $15,00 from King Biscuit Company in abvance developing a six month marketing campaing. The entire amount was intitially recorde as unearned revenue. A tDecember 31,$9,000 ha actually been eatned by the firm.
6. The company's policy is to paid its employment every Friday. Since December 31, fell on a wednesday , there was accrued liability fo salaries amountingg to $1,9000.
a. record the necessary
b. By how much di Valerie & Christopher, net income increse or decrease as a result of the adjustin entries performed in part a.(ignore income taxes)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
