Account title Cash Accounts Receivables N/R Supplies Prepaid rent December 31, 2015 Land Building Accumulated Depreciation, building Accounts Payable N/P Unearned service revenue Susan Cloud, capital Susan Cloud, withdrawals Service revenue Salary expenses Rent expenses Miscellaneous expenses Total Debit 131000 104000 10000 4000 27000 45000 300000 57000 255000 25000 8000 966000 Balance Credit 155000 159000 10000 40000 152000 450000 966000 Cloud must make adjusting entries related to the following items:- 1. Supplies on hand at year-end, $3000. 2. Nine months of rent ($27000) was paid in advance on April 1, 2015. No rent expenses has been recorded since that date. 3. Depreciation expenses has not been recorded on the building for 2015. The building has a useful life of 20 years. 4. Employees work from Sunday through Thursday. Unpaid salaries for the month of December is $5000. 5. Service revenue of $16000 credit sales must be recognized 6. A client paid $40000 in advance for consulting services to be provided evenly from July 1, 2015, through February 28, 2017. None of th revenue from this client has been recorded. 7. The company lent $13000 on Dec 1 to another company, and issued a 90 days note at 15% interest. Requirements:- 1- Prepare the adjusted trial balance for the whole year. 2- Prepare the income statement and the balance sheet on December 31, 2015. 1 nrs
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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