Am Vegas Started A Business Called Blazin Sevens
Am Vegas Started A Business Calledblazinsevens The Following Is the
Am Vegas started a business called Blazinsevens. The following is the trial balance as of December 31 on the first year of operations. Using this information, please complete the remainder of the attached worksheet. Office supplies inventory as of December 31, $190. Unexpired insurance as of December 31, $700. Depreciation of delivery equipment, $450. Wages earned but not paid as of December 31, $225.
Paper For Above instruction
This paper aims to prepare an organized and comprehensive financial statement summary for Blazinsevens, a business started by Am Vegas. Based on the provided trial balance and adjustments, the goal is to accurately complete the worksheet, which includes adjusting entries for supplies, insurance, depreciation, and wages. Ensuring correct accounting for these adjustments is essential to reflect the company's true financial position as of December 31, the end of its first operational year.
Introduction
Starting a new business involves diligent financial recording and management to accurately depict the company's financial condition. Blazinsevens, founded by Am Vegas, has its initial trial balance as of December 31. To prepare the financial statements, certain adjustments are necessary to account for supplies used, unexpired insurance, depreciation of delivery equipment, and wages earned but unpaid. These adjustments ensure that revenues and expenses are recognized in the proper accounting period, and the company's assets and liabilities are correctly valued.
Trial Balance and Initial Data
The trial balance provides a snapshot of account balances at year-end. However, certain accounts require adjustments based on physical counts and estimates:
1. Office supplies inventory as of December 31: $190.
2. Unexpired insurance as of December 31: $700.
3. Depreciation of delivery equipment for the year: $450.
4. Wages earned but not paid as of December 31: $225.
Adjusting Entries
Adjusting entries are necessary to conform to accrual accounting principles, which recognize revenues when earned and expenses when incurred:
- Supplies Expense: Office supplies used = Beginning supplies inventory - Ending inventory ($190). Since only ending inventory is provided, assume beginning supplies are higher and adjust accordingly.
- Insurance Expense: The unexpired portion of insurance is $700, which reduces total insurance expense.
- Depreciation Expense: The depreciation of delivery equipment at $450 needs to be recorded to allocate the cost of the equipment over its useful life.
- Wages Expense: Wages earned but unpaid amount to $225, so wages payable must be increased.
Completing the Worksheet
The worksheet will include columns for trial balance, adjustments, adjusted trial balance, income statement, and balance sheet. Each account affected will be adjusted accordingly, updating balances to reflect the correct financial position.
Asset and liability adjustments will involve:
- Deducting used supplies from inventory to reflect supplies expense.
- Recognizing insurance expense for the period based on unexpired insurance.
- Recording depreciation as an expense and updating asset values.
- Increasing wages payable to match accrued wages.
Conclusion
By implementing these adjustments, Blazinsevens' financial statements will more accurately portray the company's assets, liabilities, revenues, and expenses as of December 31. These adjustments facilitate the preparation of the income statement and balance sheet, essential for assessing the financial health and operational success of the business. Accurate financial reporting in a startup environment like Blazinsevens is crucial for internal decision-making, attracting investors, and ensuring compliance with accounting standards.
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