The following is a December 31, 2021, post-closing trial balance for Almway Corporation. Account Title Debits Credits Cash $ 71,000 Investment in equity securities 136,000 Accounts receivable 73,000 Inventory 213,000 Prepaid insurance (for the next 9 months) 6,000 Land 116,000 Buildings 433,000 Accumulated depreciation—buildings $ 113,000 Equipment 123,000 Accumulated depreciation—equipment 73,000 Patent (net) 23,000 Accounts payable 101,000 Notes payable 169,000 Interest payable 33,000 Bonds Payable 253,000 Common stock 339,000 Retained earnings 113,000 Totals $ 1,194,000 $ 1,194,000 Additional information: The investment in equity securities account includes an investment in common stock of another corporation of $43,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. The land account includes land which cost $38,000 that the company has not used and is currently listed for sale. The cash account includes $28,000 restricted in a fund to pay bonds payable that mature in 2024 and $36,000 restricted in a three-month Treasury bill. The notes payable account consists of the following: a $43,000 note due in six months. a $63,000 note due in six years. a $63,000 note due in five annual installments of $12,600 each, with the next installment due February 15, 2022. The $73,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $7,000. The common stock account represents 113,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized. Required: Prepare a classified balance sheet for the Almway Corporation at December 31, 2021. (Amounts to be deducted should be indicated by 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 following is a December 31, 2021, post-closing
| Account Title | Debits | Credits | |||||
| Cash | $ | 71,000 | |||||
| Investment in equity securities | 136,000 | ||||||
| Accounts receivable | 73,000 | ||||||
| Inventory | 213,000 | ||||||
| Prepaid insurance (for the next 9 months) | 6,000 | ||||||
| Land | 116,000 | ||||||
| Buildings | 433,000 | ||||||
| $ | 113,000 | ||||||
| Equipment | 123,000 | ||||||
| Accumulated depreciation—equipment | 73,000 | ||||||
| Patent (net) | 23,000 | ||||||
| Accounts payable | 101,000 | ||||||
| Notes payable | 169,000 | ||||||
| Interest payable | 33,000 | ||||||
| Bonds Payable | 253,000 | ||||||
| Common stock | 339,000 | ||||||
| Retained earnings | 113,000 | ||||||
| Totals | $ | 1,194,000 | $ | 1,194,000 | |||
Additional information:
- The investment in equity securities account includes an investment in common stock of another corporation of $43,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year.
- The land account includes land which cost $38,000 that the company has not used and is currently listed for sale.
- The cash account includes $28,000 restricted in a fund to pay bonds payable that mature in 2024 and $36,000 restricted in a three-month Treasury bill.
- The notes payable account consists of the following:
- a $43,000 note due in six months.
- a $63,000 note due in six years.
- a $63,000 note due in five annual installments of $12,600 each, with the next installment due February 15, 2022.
- The $73,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $7,000.
- The common stock account represents 113,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.
Required:
Prepare a classified
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