PS Music Unadjusted Trial Balance July 31, 20YS Account Debit Credit No. Balances Balances Cash Accounts Receivable. 1 9,945 12 2,750 Supplies... Prepaid Insurance Office Equipment . Accounts Payable Unearned Revenue. 14 1,020 2,700 7,500 15 17 21 8,350 7,200 9,000 23 Common Stock 31 Dividends 33 1,750 Fees Earned. 41 16,200 Wages Expense Office Rent Expense. Equipment Rent Expense Utilities Expense Music Expense. Advertising Expense... Supplies Expense... Miscellaneous Expense 50 2,800 51 2,550 52 1,375 1,215 3,610 1,500 180 53 54 55 56 1855 40,750 59 40,750
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.
The unadjusted
The data needed to determine adjustments are as follows:
• During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3 transaction at the end of Chapter 2
. Supplies on hand at July 31, $275-
. The balance of the prepaid insurance account relates to the July 1 transaction at the end of Chapter 2.
.Depreciation of the office equipment is $50.
.The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3 transaction at the end of Chapter 2.
• Accrued wages as of July 31 were $140.
Instructions
1. Prepare adjusting
18
57 Insurance Expense
58 Depreciation Expense
2.
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