Financial statementsThe amounts of the assets and liabilities of Journey Travel Agency at December 31, 2018, the end of the year, and its revenue and expenses for the year follow. The retained earnings were $1,341,000 on January 1, 2018, the beginning of the year. During the year, dividends of $75,000 were paid.Accounts payable $69,500 Miscellaneous expense $14,500Accounts receivable $236,500 Rent expense $22,500Cash 190,500 Supplies 7,000Common stock 450,000 Supplies expense 11,300Fees earned 383,500 Utilities expense 16,700Land 1,500,000 Wages expense 170,000Instructions1. Prepare an income statement for the year ended December 31, 2018.2. Prepare a retained earnings statement for the year ended December 31, 2018.3. Prepare a balance sheet as of December 31, 2018.4. What item appears on both the retained earnings statement and the balance sheet?
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.
Financial statements
The amounts of the assets and liabilities of Journey Travel Agency at December 31, 2018, the end of the year, and its revenue and expenses for the year follow. The
Accounts payable $69,500 Miscellaneous expense $14,500
Accounts receivable $236,500 Rent expense $22,500
Cash 190,500 Supplies 7,000
Common stock 450,000 Supplies expense 11,300
Fees earned 383,500 Utilities expense 16,700
Land 1,500,000 Wages expense 170,000
Instructions
1. Prepare an income statement for the year ended December 31, 2018.
2. Prepare a retained earnings statement for the year ended December 31, 2018.
3. Prepare a balance sheet as of December 31, 2018.
4. What item appears on both the retained earnings statement and the balance sheet?
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