The unadjusted trial balance of Fix-It Co. at February 28, 2010, the end of the current year, is shown below.The data needed to determine year-end adjustments are as follows:a. Supplies on hand at February 28 are $4,000.b. Insurance premiums expired during year are $2,000.c. Depreciation of equipment during year is $6,000.d. Depreciation of trucks during year is $3,500.e. Wages accrued but not paid at February 28 are $450.Instructions1. For each account listed in the trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark (✔) in the Posting Reference column.2. Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet. Add the accounts listed in part (3) as needed.3. Journalize and post the adjusting entries, inserting balances in the accounts affected.The following additional accounts from Fix-It’s chart of accounts should be used: Wages Payable, 22; Supplies Expense, 52; Depreciation Expense—Equipment, 54; Depreciation Expense—Trucks, 56; Insurance Expense, 57.4. Prepare an adjusted trial balance.5. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.6. Journalize and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.7. Prepare a post-closing trialbalance. View Solution: The unadjusted trial balance of Fix It Co at February 28
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 trial balance of Fix-It Co. at February 28, 2010, the end of the current year, is shown below.The data needed to determine year-end adjustments are as follows:a. Supplies on hand at February 28 are $4,000.b. Insurance premiums expired during year are $2,000.c. Depreciation of equipment during year is $6,000.d. Depreciation of trucks during year is $3,500.e. Wages accrued but not paid at February 28 are $450.Instructions1. For each account listed in the trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark (✔) in the Posting Reference column.2. Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet. Add the accounts listed in part (3) as needed.3. Journalize and post the adjusting entries, inserting balances in the accounts affected.The following additional accounts from Fix-It’s chart of accounts should be used: Wages Payable, 22; Supplies Expense, 52; Depreciation Expense—Equipment, 54; Depreciation Expense—Trucks, 56; Insurance Expense, 57.4. Prepare an adjusted trial balance.5. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.6. Journalize and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.7. Prepare a post-closing trialbalance.
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The unadjusted trial balance of Fix It Co at February 28
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