he unadjusted trial balance of PS Music as of July 31, 2019, along with the adjustment data for the two months ended July 31, 2019, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared: PS Music ADJUSTED TRIAL BALANCE July 31, 2019 ACCOUNT TITLE DEBIT CREDIT 1 Cash 9,945.00 2 Accounts Receivable 4,150.00 3 Supplies 275.00 4 Prepaid Insurance 2,475.00 5 Office Equipment 7,500.00 6 Accumulated Depreciation-Office Equipment 50.00 7 Accounts Payable 8,350.00 8 Wages Payable 140.00 9 Unearned Revenue 3,600.00 10 Peyton Smith, Capital 9,000.00 11 Peyton Smith, Drawing 1,750.00 12 Fees Earned 21,200.00 13 Wages Expense 2,940.00 14 Office Rent Expense 2,550.00 15 Equipment Rent Expense 1,375.00 16 Utilities Expense 1,215.00 17 Music Expense 3,610.00 18 Advertising Expense 1,500.00 19 Supplies Expense 925.00 20 Insurance Expense 225.00 21 Depreciation Expense 50.00 22 Miscellaneous Expense 1,855.00 23 Totals 42,340.00 42,340.00 Note: Peyton Smith made investments in PS Music on June 1 and July 1, 2019.)* Prepare a statement of owner’s equity. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtractive or negative numbers use a minus sign.
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
PS Music
ADJUSTED TRIAL BALANCE
July 31, 2019
|
ACCOUNT TITLE |
DEBIT |
CREDIT |
|
|
1 |
Cash |
9,945.00 |
|
|
2 |
Accounts Receivable |
4,150.00 |
|
|
3 |
Supplies |
275.00 |
|
|
4 |
Prepaid Insurance |
2,475.00 |
|
|
5 |
Office Equipment |
7,500.00 |
|
|
6 |
|
|
50.00 |
|
7 |
Accounts Payable |
|
8,350.00 |
|
8 |
Wages Payable |
|
140.00 |
|
9 |
Unearned Revenue |
|
3,600.00 |
|
10 |
Peyton Smith, Capital |
|
9,000.00 |
|
11 |
Peyton Smith, Drawing |
1,750.00 |
|
|
12 |
Fees Earned |
|
21,200.00 |
|
13 |
Wages Expense |
2,940.00 |
|
|
14 |
Office Rent Expense |
2,550.00 |
|
|
15 |
Equipment Rent Expense |
1,375.00 |
|
|
16 |
Utilities Expense |
1,215.00 |
|
|
17 |
Music Expense |
3,610.00 |
|
|
18 |
Advertising Expense |
1,500.00 |
|
|
19 |
Supplies Expense |
925.00 |
|
|
20 |
Insurance Expense |
225.00 |
|
|
21 |
Depreciation Expense |
50.00 |
|
|
22 |
Miscellaneous Expense |
1,855.00 |
|
|
23 |
Totals |
42,340.00 |
42,340.00 |
Note: Peyton Smith made investments in PS Music on June 1 and July 1, 2019.)*
- Prepare a statement of owner’s equity. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtractive or negative numbers use a minus sign.
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