ACCTS RECEIVABLE P 22,500 ALLOWANCE FOR IMPAIRMENT LOSS 1,200 NOTES RECEIVABLE 20,000 OFFICE EQUIPMENT 92,000 ACCUMUMULATED DEPRECIATION 4,500 RENTAL INCOME 12,000 SERVICE INCOME 450,000 SUPPLIES EXPENSE 6,250 INSURANCE EXPENSE 7,200 SALARIES EXPENSE 120,000 REQUIRED: PREPARE ADJUSTING ENTRIES FOR DEC. 31, 2021. 1. UNUSED OFFICE SUPPLIES AT THE END, P 320. 2. ONE-YEAR INSURANCE WAS PAID ON APRIL 1 OF THE CURRENT YEAR. 3. OFFICE EQUIPMENT HAD A USEFUL LIFE OF 10 YEARS WITH SCRAP VALUE OF P2,000. IT WAS ACQUIRED JULY 1, 2021. 4. UNEARNED RENTAL INCOME IS 1/3 OF THE AMOUNT COLLECTED. 5. SERVICE INCOME NOT YET COLLECTED, P3,000. 6. THE 60-DAY 6% NOTE WAS RECEIVED ON DECEMBER 1, 2021. 7. ESTIMATED BAD DEBTS IS 10% OF THE ACCOUNTS RECEIVABLE. 8. ACCRUED SALARIES IS P12,000.
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.
ACCTS RECEIVABLE P 22,500
ALLOWANCE FOR IMPAIRMENT LOSS 1,200
NOTES RECEIVABLE 20,000
OFFICE EQUIPMENT 92,000
ACCUMUMULATED DEPRECIATION 4,500
RENTAL INCOME 12,000
SERVICE INCOME 450,000
SUPPLIES EXPENSE 6,250
INSURANCE EXPENSE 7,200
SALARIES EXPENSE 120,000
REQUIRED:
PREPARE
1. UNUSED OFFICE SUPPLIES AT THE END, P 320.
2. ONE-YEAR INSURANCE WAS PAID ON APRIL 1 OF THE CURRENT YEAR.
3. OFFICE EQUIPMENT HAD A USEFUL LIFE OF 10 YEARS WITH SCRAP VALUE OF P2,000. IT WAS ACQUIRED JULY 1, 2021.
4. UNEARNED RENTAL INCOME IS 1/3 OF THE AMOUNT COLLECTED.
5. SERVICE INCOME NOT YET COLLECTED, P3,000.
6. THE 60-DAY 6% NOTE WAS RECEIVED ON DECEMBER 1, 2021.
7. ESTIMATED
8. ACCRUED SALARIES IS P12,000.
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