Given the following unadjusted account information for Delaney Corporation, journalize the adjusting entries and prepare an adjusted trial balance. Then, prepare a balance sheet in report form for the company as of December 31, 2021. All accounts have normal balances. Equipment 90,000 Interest Expense 1,800 Dividends 50,400 Land 137,320 Accounts Receivable 100,060 Bonds Payable 72,000 Notes Payable (due in 6 months) 9,400 Common Stock 102,000 Prepaid Advertising 6,000 Service Revenue 393,460 Buildings 170,400 Supplies 2,420 Income Taxes Payable 3,000 Utilities Expense 1,320 Salaries and Wages Expense 50,140 Accumulated Depr. - Buildings 75,000 Cash 45,000 Other data: 1. The balance in prepaid advertising is a one-year premium paid on November 1, 2021. 2. The company performed services of $1,940 in December. 3. An inventory count on December 31 shows $1,860 of supplies on hand. 4. Annual depreciation rates are buildings (10%) and equipment (10%). Salvage value is estimated to be $20,400 for buildings and there is no salvage value for equipment. 5. Salaries of $2,900 were unpaid at December 31. 6. The interest on Bonds has been accrued for two months since November 1, 2021 at the annual rate of 5%.
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.
Adjusted
Given the following unadjusted account information for Delaney Corporation, journalize the
Equipment 90,000
Interest Expense 1,800
Dividends 50,400
Land 137,320
Bonds Payable 72,000
Notes Payable (due in 6 months) 9,400
Common Stock 102,000
Prepaid Advertising 6,000
Service Revenue 393,460
Buildings 170,400
Supplies 2,420
Income Taxes Payable 3,000
Utilities Expense 1,320
Salaries and Wages Expense 50,140
Accumulated Depr. - Buildings 75,000
Cash 45,000
Other data:
1. The balance in prepaid advertising is a one-year premium paid on November 1, 2021.
2. The company performed services of $1,940 in December.
3. An inventory count on December 31 shows $1,860 of supplies on hand.
4. Annual
5. Salaries of $2,900 were unpaid at December 31.
6. The interest on Bonds has been accrued for two months since November 1, 2021 at the annual rate of 5%.
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