On June 30 of the current year, Rosemount Copy Center has completed the Trial Balance columns of the work sheet. Analyze the adjustment information given here into debit and credit parts. Record the adjustments on the work sheet. Total the Adjustments columns. Adjustment Information June 30 Supplies on hand $188.00 Value of prepaid insurance 540.00 WORK SHEET For Month Ended June 30, 20-- ACCOUNT TITLE TRIAL BALANCE ADJUSTMENTS INCOME STATEMENT BALANCE SHEET DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT 1 Cash 8,715.00 1 2 Petty Cash 75.00 2 3 Accounts Receivable-Raymond O’Neil 642.00 3 4 Supplies 518.00 4 5 Prepaid Insurance 675.00 5 6 Accounts Payable-Western Supply 268.00 6 7 Akbar Sharma, Capital 9,695.00 7 8 Akbar Sharma, Drawing 375.00 8 9 Income Summary 9 10 Sales 1,704.00 10 11 Advertising Expense 255.00 11 12 Cash Short and Over 2.00 12 13 Insurance Expense 13 14 Miscellaneous Expense 138.00 14 15 Supplies Expense 15 16 Utilities Expense 272.00 16 17 11,667.00 11,667.00 17
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.
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Adjustment Information
|
June 30
|
|---|---|
| Supplies on hand | $188.00 |
| Value of prepaid insurance | 540.00 |
| ACCOUNT TITLE | TRIAL BALANCE | ADJUSTMENTS | INCOME STATEMENT | BALANCE SHEET | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| DEBIT | CREDIT | DEBIT | CREDIT | DEBIT | CREDIT | DEBIT | CREDIT | |||
|
1
|
Cash
|
8,715.00
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|
|
|
|
1
|
|
2
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Petty Cash
|
75.00
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|
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|
|
|
|
2
|
|
3
|
|
642.00
|
|
|
|
|
|
|
|
3
|
|
4
|
Supplies
|
518.00
|
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|
|
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|
|
4
|
|
5
|
Prepaid Insurance
|
675.00
|
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|
|
5
|
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6
|
Accounts Payable-Western Supply
|
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268.00
|
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|
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6
|
|
7
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Akbar Sharma, Capital
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9,695.00
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|
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|
|
7
|
|
8
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Akbar Sharma, Drawing
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375.00
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8
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|
9
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Income Summary
|
|
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9
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|
10
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Sales
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1,704.00
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|
10
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|
11
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Advertising Expense
|
255.00
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|
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|
11
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|
12
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Cash Short and Over
|
2.00
|
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|
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12
|
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13
|
Insurance Expense
|
|
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13
|
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14
|
Miscellaneous Expense
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138.00
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14
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15
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Supplies Expense
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15
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16
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Utilities Expense
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272.00
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16
|
|
17
|
|
11,667.00
|
11,667.00
|
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|
17
|
Following are the adjusting entries have been passed with explanation
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