Using the Redwood City Pet Shoppe Unadjusted Trial Balance from July 31st, prepare the followir adjusting entries for July 2021. Redwood City Pet Shoppe Unadjusted Trial Balance July 31, 2021 Cash Accounts Receivable Office Supplies (asset) Prepaid Insurance Van Accumulated Depreciation - Van Building Accumulated Depreciation - Building Accounts Payable Unearned Pet Sales Notes Payable Common Stock Dividends Retained Earnings Pet Sales Pet Food Sales Salaries Expense Depreciation Expense - Van Deprecation Expense - Building Interest Expense Advertising Expense Office Supplies Expense Utility Expense Totals Debit 235,800 24,180 10,600 42,000 35,800 157,000 15,000 33,570 5,370 39,250 13,980 24,810 15,200 13,600 666,160 Credit 7,160 47,100 18,740 2,400 120,000 200,000 150,000 77,800 42,960 666,160 The Pet Shoppe has a 5-day workweek, and the salaries paid in one week are $6,400 is on a Tuesday; prepare the adjusting entry for the last week in July.
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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