Juana Dela Cruz started a cable television service, JDC Enterprises and during the first month of operations (Oct 2022) completed the following selected transactions: cash account receivabl e Office supplies Prepaid insurance Office furniture Transmitting equi pment building Account payable Utilities payable Capital Notes payable Drawing service revenue Rent expense Advertisement ex pense Utilities expense Salaries expense Total debit 190700 7500 5800 9000 10500 95000 280800 20000 6000 3000 2600 5500 636400 3. Closing Entries 4. Post-Closing Trial Balance Credit 4300 2600 405800 200000 23700 636400 Additional information (adjustments) as of Dec. 31: a. Office furnitures & Transmitting equipment have estimated useful life of 3 & 5 years, respectively. b. Supplies on hand amounted to P3,300 c. Insurance for 3 months has been used. d. Unbilled service revenues performed in Dec, P44,800 e. The building has a useful life of 12 years. f. Utility bills last Oct were paid in December. g. Accrued salaries amounted to P7,500 h. Received water and telephone bills in the amount of P4,500 to be paid next month. i. Unearned service revenues as of Dec. amounted to P4,800 j. Unrecorded collection from credit customers, P12,500 Prepare the following as of December 31, 2022: 1. Adjusting Journal Entries 2. Worksheet (use the Oct 31 Trial Balance prepared above as the Unadjusted T/B amounts)
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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