Appendix: Adjustment Data on an End-of-Period Spreadsheet Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security Services Co. has been prepared on the following end-of-period spreadsheet for the year ended October 31, 20Y5. In addition, the data for year-end adjustments are as follows: a. Fees earned but not yet billed, $13. b. Supplies on hand, $4. c. Insurance premiums expired, $10. d. Depreciation expense, $3. e. Wages accrued but not paid, $1. Enter the adjustment data and place the balances in the Adjusted Trial Balance columns. If an amount bax does not require an entry, leave it blank. Alert Security Services Co. End-of-Period Spreadsheet (Work Sheet) For the Year Ended October 31, 20Y5 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 12 Accounts Receivable 90 Supplies Prepaid Insurance 12 Land 190 Equipment 50 Accumulated Depreciation Accounts Payable 36 Wages Payable Brenda Schultz, Capital 260 Brenda Schultz. Drawing Fees Earned 200 Wages Expense 110 Rent Expense 12 Insurance Expense Utilities Expense Supplies Expense Depreciation Expense Miscellaneous Expense Totals 500 500
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.
Appendix: Adjustment Data on an End-of-Period Spreadsheet
Alert Security Services Co. offers security services to business clients. The
- Fees earned but not yet billed, $13.
- Supplies on hand, $4.
- Insurance premiums expired, $10.
Depreciation expense, $3.- Wages accrued but not paid, $1.
Enter the adjustment data and place the balances in the Adjusted Trial Balance columns. If an amount box does not require an entry, leave it blank.
| Alert Security Services Co. End-of-Period Spreadsheet (Work Sheet) For the Year Ended October 31, 20Y5 |
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| Unadjusted Trial Balance | Adjustments | Adjusted Trial Balance | ||||||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | ||||
| Cash | 12 | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | fill in the blank 4 | |||||
| Accounts Receivable | 90 | fill in the blank 5 | fill in the blank 6 | fill in the blank 7 | fill in the blank 8 | |||||
| Supplies | 8 | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 | |||||
| Prepaid Insurance | 12 | fill in the blank 13 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 | |||||
| Land | 190 | fill in the blank 17 | fill in the blank 18 | fill in the blank 19 | fill in the blank 20 | |||||
| Equipment | 50 | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | fill in the blank 24 | |||||
| 4 | fill in the blank 25 | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 | ||||||
| Accounts Payable | 36 | fill in the blank 29 | fill in the blank 30 | fill in the blank 31 | fill in the blank 32 | |||||
| Wages Payable | 0 | fill in the blank 33 | fill in the blank 34 | fill in the blank 35 | fill in the blank 36 | |||||
| Brenda Schultz, Capital | 260 | fill in the blank 37 | fill in the blank 38 | fill in the blank 39 | fill in the blank 40 | |||||
| Brenda Schultz, Drawing | 8 | fill in the blank 41 | fill in the blank 42 | fill in the blank 43 | fill in the blank 44 | |||||
| Fees Earned | 200 | fill in the blank 45 | fill in the blank 46 | fill in the blank 47 | fill in the blank 48 | |||||
| Wages Expense | 110 | fill in the blank 49 | fill in the blank 50 | fill in the blank 51 | fill in the blank 52 | |||||
| Rent Expense | 12 | fill in the blank 53 | fill in the blank 54 | fill in the blank 55 | fill in the blank 56 | |||||
| Insurance Expense | 0 | fill in the blank 57 | fill in the blank 58 | fill in the blank 59 | fill in the blank 60 | |||||
| Utilities Expense | 6 | fill in the blank 61 | fill in the blank 62 | fill in the blank 63 | fill in the blank 64 | |||||
| Supplies Expense | 0 | fill in the blank 65 | fill in the blank 66 | fill in the blank 67 | fill in the blank 68 | |||||
| Depreciation Expense | 0 | fill in the blank 69 | fill in the blank 70 | fill in the blank 71 | fill in the blank 72 | |||||
| Miscellaneous Expense | 2 | fill in the blank 73 | fill in the blank 74 | fill in the blank 75 | fill in the blank 76 | |||||
| Totals | 500 | 500 | fill in the blank 77 | fill in the blank 78 | fill in the blank 79 | fill in the blank 80 |
Working note:
Journal entry
For easy understanding, before posting balance to trail balance we will prepare journal entries
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Debit |
Credit |
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1 |
Fess Earned not yet billed |
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Accounts Receivable |
13 |
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Unearned Revenue |
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13 |
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2 |
Supplies on Hand $4 |
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Supplies Expense |
4 |
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supplies |
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4 |
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3 |
Insurance Premium Expired |
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Insurance expense |
10 |
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Prepaid Insurance |
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10 |
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4 |
Depreciation expense |
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Depreciation expense |
3 |
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To Accumulated Depreciation |
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3 |
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5 |
Wages Accrued but not paid |
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Wages Expenses |
1 |
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To wages Payable |
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1 |
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