Question 1 In general journal form and with T-accounts, record adjusting entries for the following items for Cornish Accounting Co. at December 31, 2021. a) On January 3, 2021, $5,500 of supplies were purchased and recorded as an asset. A count revealed $500 still on hand at December 31, 2021. b) Services performed during December but not yet billed to customers totalled $2,500. c) On July 1, 2021, a $10,000 car was purchased on account. The car is expected to last 4 years and have no residual value at the end of its useful life. d) On December 31, 2021 utilities owed but not yet paid amounted to $500. e) On January 10, 2021 Cornish Accounting Co. accepted a $5,000 deposit from a client for tax work to be completed during the year. The deposit was recorded as unearned revenue. On December 31, 2021 all the tax work for the client is complete. Required: Record the adjusting entries for each of the transactions above. (Optional for your learning: Set the relevant T-Accounts and record the entries above. For the transactions above which do not specify an opening balance, assume it is $0.00. For the Cash T-Account, assume that the opening balance on January 1, 2021 is $10,000. For T-accounts, an excel document may be attached to the submission if it is easier.) Question 2 Enviro Waste's year-end is December 31. No adjusting journal entries have been made relating to the below as at December 31, 2022. The information in (a) to (e) is available at year-end for the preparation of adjusting entries: a Of the $18,500 balance in Unearned Revenue, $3,050 remains unearned. b The annual building depreciation is $14,600. c The Spare Parts Inventory account shows an unadjusted balance of $1,200. A physical count reveals a balance on hand of $980. d Unbilled and uncollected services provided to customers totalled $14,600. e The utility bill for the month of December was received but is unpaid; $2,100. Required Prepare the required adjusting entries at December 31, 2022, for (a) to (e) and the subsequent cash entries required for (f) and (g). f The accrued revenues of $14,600 recorded in (d) were collected on January 4, 2023. g The $2,100 utility bill accrued in (e) was paid on January 14, 2023. 2022 Journal Entries: 2023 Journal Entries:
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.
Question 1
In general journal form and with T-accounts, record
a) On January 3, 2021, $5,500 of supplies were purchased and recorded as an asset. A count revealed $500 still on hand at December 31, 2021.
b) Services performed during December but not yet billed to customers totalled $2,500.
c) On July 1, 2021, a $10,000 car was purchased on account. The car is expected to last 4 years and have no residual value at the end of its useful life.
d) On December 31, 2021 utilities owed but not yet paid amounted to $500.
e) On January 10, 2021 Cornish Accounting Co. accepted a $5,000 deposit from a client for tax work to be completed during the year. The deposit was recorded as unearned revenue. On December 31, 2021 all the tax work for the client is complete.
Required:
Record the adjusting entries for each of the transactions above. (Optional for your learning: Set the relevant T-Accounts and record the entries above. For the transactions above which do not specify an opening balance, assume it is $0.00. For the Cash T-Account, assume that the opening balance on January 1, 2021 is $10,000. For T-accounts, an excel document may be attached to the submission if it is easier.)
Question 2
Enviro Waste's year-end is December 31. No adjusting
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a |
Of the $18,500 balance in Unearned Revenue, $3,050 remains unearned. |
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b |
The annual building |
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c |
The Spare Parts Inventory account shows an unadjusted balance of $1,200. A physical count reveals a balance on hand of $980. |
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d |
Unbilled and uncollected services provided to customers totalled $14,600. |
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e |
The utility bill for the month of December was received but is unpaid; $2,100. |
Required Prepare the required adjusting entries at December 31, 2022, for (a) to (e) and the subsequent cash entries required for (f) and (g).
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f |
The accrued revenues of $14,600 recorded in (d) were collected on January 4, 2023. |
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g |
The $2,100 utility bill accrued in (e) was paid on January 14, 2023. |
2022 Journal Entries:
2023 Journal Entries:
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