This pages is about explaining a type of adjusting entries. In the second paragraph, last sentances, "Thus,...November." Why is in October and November? How about the December? As the trial balacne shown in other image is in Decemenr 31, so the 1560 liability for income taxes payable represaesnts only the income taxes accrued from October to December. But not to Novemebr. Yes? As this three months liability haven't paid yet! on act of fou12 10 920514Don Justibubrous]nsactioncash inement ofbilitytionashent oflejustingpresentpond-comeet orcontroller or by a professional accountant, rather thanIn many businesses, the1922-) 1 ns of tibstols bus inuososof sinine di obuloni atnomYEAR-END AT OVERNIGHT AUTO SERVICE90sqxs noilsissiqsbTo illustrate the various types of adjusting entries, we will again use our example involvingOvernight Auto Service. Chapter 3 concluded with Overnight's trial balance dated 28 February2013 (the end of the company's second month of operations). We will now skip ahead to31 December 2013-the end of Overnight's first year of operations. This will enable us toillustrate the preparation of annual financial statements, rather than statements that cover onlyusqs bingsta single month.qxs om21 316Timur flMost companies make adjusting entries every month. We will assume that Overnight hasbeen following this approach throughout 2013. The company's unadjusted trial balance dated31 December 2013, appears in Exhibit 4-2. It is referred to as an unadjusted trial balancebecause Overnight last made adjusting entries on 30 November; therefore, it is still necessaryto make adjusting entries for the month of December. nismo esilqque odi to obem ei sismilesGIDbozu gosd sved of bomueen sus "anizzim" 916adjby the regular accounting staff.yoneCash.o another opiraos esilqqueAccounts receivable.obom arShop supplies...Unexpired insurance...Land ...Building...Accumulated depreciation: buildingTools and equipmentAccumulated depreciation: tools and equipmentSmNotes payable....291aqu2Accounts payable.veas of:29200100Income taxes payable.s. 2eilgqu2 god? or to somsled sri 29Unearned rent revenue.Share capital...-ORetained earningsOVERNIGHT AUTO SERVICETrial Balance31 December 2013Dividends.. od: 2.A.orab. 1Repair service revenue.Utilities expense..Insurance expenseIncome taxes expense...000.81-THROUAdvertising expense.01 0:812Wages expense ..-mahlasSupplies expense. 26 90SONST nibus constant viilidsil svislipstDepreciation expense: building.Depreciation expense: tools and equipment.nt qu'boa1.18 is bridSmium2629 LE is basd noad.o!!In 2sipilog.$ 18,5926,5001,8004,50052,00036,00092 smst esilqqueni bozdedmebed12,0002,0004,000wiesvise yuns gaitzujbs 2,690boti (S) bas 19dmsos$ 1,5001,56020.01. betsmites asilqque to 9,000 s80,000onl1201.1. 29iil09 9org stsoms 14,000V192 sbivho sdt smTeigmo29tique voilo mi3,90056,8006,900¹ Yoilogesloidev 1,500 o ogs20quopos 15222,000 batidsb 26wcons171,250Ieteulli OTof19,40013,50022,608 U$272,000 $272,000In the next few pages we illustrate several transactions, as well as the related adjust-ing entries. Both are shown in the format of general journal entries. To help distinguishbetween transactions and adjusting entries, transactions are printed in blue and adjusting entriesni od to noino di non consled sin endgimovoni stor sans soniniin red.Trea$لعهاitmoerExhUNABAL 4,0006030000,02 Lbeleincluding4,090he customerervices areed until all50the currentking entry.propriatehas beenered intottle Ser-able ontodet beenymentustingh:pensery31.dACCRUING INCOME TAXES EXPENSE: tofsymomat 21THE FINAL ADJUSTING ENTRYAs a corporation earns taxable income, it incurs income taxes expense, and also a liabilityto governmental tax authorities. In each country, the tax remittance requirements are not thesame. For Overnight, our illustration assumes several requirements as follows: (a) the taxliability is paid in four installments called estimated quarterly payments; (b) the first threepayments normally are made on 15 April, 15 June, and 15 September; and (c) the finalpayment is not due until 15 January of the following year.63120Overicpnsenstakit TaIn its unadjusted trial balance (Exhibit 4-2 on page 147), Overnight shows income taxesexpense of $22,608. This is the income taxes expense recognized from 20 January 2013,(the date Overnight opened for business) through 30 November 2013. Income taxes accruedDINERthrough 30 September have already been paid. Thus, the $1,560 liability for income taxespayable represents only the income taxes accrued in October and November.Smonbemos 91Tortinng Sms 25congueurotJThe amount of income taxes expense accrued for any given month is only an estimate. TheJorpilidaily in to25x1DURISIONtomosfillPALLETactual amount of income taxes cannot be determined until the company prepares its annualSmilHipoti vege5510.192209440100income tax return. In our illustrations and assignment materials, we estimate income taxesinsamos en su 2misombanshzeand areexpense at 40 percent of taxable income. We also assume that taxable income is equal toDorisq torq hisensake be also assume that.profit before income taxes, a subtotal often shown in an income statement. This subtotal isanomearlos19-189 S 900660 1090 5280 INDO996 9106Y61 25X61Я эmoonlal revenue less all expenses other than income taxes. A "sldsvisos bouts & smoon!"[-A tididxal ni awodz 28.2201 xsi-erotsd sr) to Jawoms sri jenison 19aflototalAnothINTERNATIONAL CASE IN POINTCorporate income tax rates vary around the world. A recent survey shows that rates morrange from 9 percent in Montenegro to 55 percent in the United Arab Emirates. Theaverage tax rate is 25 percent worldwide and 40 percent in the United States.* Inaddition to corporate income taxes, some countries also (1) withhold taxes on dividends,interest, and royalties, (2) charge value-added taxes at specified production anddistribution points, and (3) impose border taxes such as customs and import duties. Wni-alitaned xs/ omoon in won soil*KPMG Corporate Tax Rate Survey (January 2009)ber 25xil dem SAT 320kBusin ses purchase many assets that have a very loprofiSIn 2013, Overnight earned profit before income taxes of $66,570 (see the income state-ment in Exhibit 5-2, page 198, in Chapter 5). Therefore, income taxes expense for the entireyear is estimated at $26,628 ($66,570 × 40 percent). Given that income taxes expenserecognized through 30 November amounts to $22,608 (see the unadjusted trial balancein Exhibit 4-2), an additional $4,020 in income taxes expense must have accrued duringBb Veond nitheexpense is:bersbrony Hssiosintogard blozS9TD eboog/smirorhdittoisuier coise los bossbong ghims bersigmon4,020 lavitodidaecember ($26,628 - $22,608). The adjusting entry to record thisesd 225plaud oni moqainOSTERSEN OG HU31 Dec.Income Taxes ExpenseTROLEU225302102,20Income Taxes PayableGLE219maizubiyet4,020isitAbstamitas Sd VinoDIEAdjusting entry to record income taxes accrued in December.ovo nishoo viestitalomallaugu ziraidh bhsignored if the dollar amo..This entry increases the balance in the Income Taxes Expense account to the $26,628year enamount required for thesidXBJShqxs XXS 5Vinkysh as to visos flat a time of any i miyear ended 31 December 2013. It also increases the liability forincome taxes payable to $5,580 ($1,560 + $4,020). The transaction to record the paymental mio bist and aSabqmod wolpin Ub Shri¹x Bin (ashunos olhos fil hovswol bonsq instio oli ni zal oil or gainaloi6 This assumption enables us toenables us to accrue income taxes in December in the same manner as in other months.Otherwise, income taxes for this month would be recorded as a mid-month transaction, rather than in anend-of-month adjusting entry. The adjusting entry for income taxes is an example of an accrued, but unpaid,Apizare:diexpense.H₂Dothniso tile220l xaOTHT-A tidid:SMOOTIOТИЗМЕТАТnoBuwAdjusting entincome taxes

Question

This pages is about explaining a type of adjusting entries. In the second paragraph, last sentances, &#34;Thus,...November.&#34; Why is in October and November? How about the December? As the trial balacne shown in other image is in Decemenr 31, so the 1560 liability for income taxes payable represaesnts only the income taxes accrued from October to December. But not to Novemebr. Yes? As this three months liability haven't paid yet! on act of fou12 10 920514Don Justibubrous]nsactioncash inement ofbilitytionashent oflejustingpresentpond-comeet orcontroller or by a professional accountant, rather thanIn many businesses, the1922-) 1 ns of tibstols bus inuososof sinine di obuloni atnomYEAR-END AT OVERNIGHT AUTO SERVICE90sqxs noilsissiqsbTo illustrate the various types of adjusting entries, we will again use our example involvingOvernight Auto Service. Chapter 3 concluded with Overnight's trial balance dated 28 February2013 (the end of the company's second month of operations). We will now skip ahead to31 December 2013-the end of Overnight's first year of operations. This will enable us toillustrate the preparation of annual financial statements, rather than statements that cover onlyusqs bingsta single month.qxs om21 316Timur flMost companies make adjusting entries every month. We will assume that Overnight hasbeen following this approach throughout 2013. The company's unadjusted trial balance dated31 December 2013, appears in Exhibit 4-2. It is referred to as an unadjusted trial balancebecause Overnight last made adjusting entries on 30 November; therefore, it is still necessaryto make adjusting entries for the month of December. nismo esilqque odi to obem ei sismilesGIDbozu gosd sved of bomueen sus &#34;anizzim&#34; 916adjby the regular accounting staff.yoneCash.o another opiraos esilqqueAccounts receivable.obom arShop supplies...Unexpired insurance...Land ...Building...Accumulated depreciation: buildingTools and equipmentAccumulated depreciation: tools and equipmentSmNotes payable....291aqu2Accounts payable.veas of:29200100Income taxes payable.s. 2eilgqu2 god? or to somsled sri 29Unearned rent revenue.Share capital...-ORetained earningsOVERNIGHT AUTO SERVICETrial Balance31 December 2013Dividends.. od: 2.A.orab. 1Repair service revenue.Utilities expense..Insurance expenseIncome taxes expense...000.81-THROUAdvertising expense.01 0:812Wages expense ..-mahlasSupplies expense. 26 90SONST nibus constant viilidsil svislipstDepreciation expense: building.Depreciation expense: tools and equipment.nt qu'boa1.18 is bridSmium2629 LE is basd noad.o!!In 2sipilog.$ 18,5926,5001,8004,50052,00036,00092 smst esilqqueni bozdedmebed12,0002,0004,000wiesvise yuns gaitzujbs 2,690boti (S) bas 19dmsos$ 1,5001,56020.01. betsmites asilqque to 9,000 s80,000onl1201.1. 29iil09 9org stsoms 14,000V192 sbivho sdt smTeigmo29tique voilo mi3,90056,8006,900¹ Yoilogesloidev 1,500 o ogs20quopos 15222,000 batidsb 26wcons171,250Ieteulli OTof19,40013,50022,608 U$272,000 $272,000In the next few pages we illustrate several transactions, as well as the related adjust-ing entries. Both are shown in the format of general journal entries. To help distinguishbetween transactions and adjusting entries, transactions are printed in blue and adjusting entriesni od to noino di non consled sin endgimovoni stor sans soniniin red.Trea$لعهاitmoerExhUNABAL 4,0006030000,02 Lbeleincluding4,090he customerervices areed until all50the currentking entry.propriatehas beenered intottle Ser-able ontodet beenymentustingh:pensery31.dACCRUING INCOME TAXES EXPENSE: tofsymomat 21THE FINAL ADJUSTING ENTRYAs a corporation earns taxable income, it incurs income taxes expense, and also a liabilityto governmental tax authorities. In each country, the tax remittance requirements are not thesame. For Overnight, our illustration assumes several requirements as follows: (a) the taxliability is paid in four installments called estimated quarterly payments; (b) the first threepayments normally are made on 15 April, 15 June, and 15 September; and (c) the finalpayment is not due until 15 January of the following year.63120Overicpnsenstakit TaIn its unadjusted trial balance (Exhibit 4-2 on page 147), Overnight shows income taxesexpense of $22,608. This is the income taxes expense recognized from 20 January 2013,(the date Overnight opened for business) through 30 November 2013. Income taxes accruedDINERthrough 30 September have already been paid. Thus, the $1,560 liability for income taxespayable represents only the income taxes accrued in October and November.Smonbemos 91Tortinng Sms 25congueurotJThe amount of income taxes expense accrued for any given month is only an estimate. TheJorpilidaily in to25x1DURISIONtomosfillPALLETactual amount of income taxes cannot be determined until the company prepares its annualSmilHipoti vege5510.192209440100income tax return. In our illustrations and assignment materials, we estimate income taxesinsamos en su 2misombanshzeand areexpense at 40 percent of taxable income. We also assume that taxable income is equal toDorisq torq hisensake be also assume that.profit before income taxes, a subtotal often shown in an income statement. This subtotal isanomearlos19-189 S 900660 1090 5280 INDO996 9106Y61 25X61Я эmoonlal revenue less all expenses other than income taxes. A &#34;sldsvisos bouts & smoon!&#34;[-A tididxal ni awodz 28.2201 xsi-erotsd sr) to Jawoms sri jenison 19aflototalAnothINTERNATIONAL CASE IN POINTCorporate income tax rates vary around the world. A recent survey shows that rates morrange from 9 percent in Montenegro to 55 percent in the United Arab Emirates. Theaverage tax rate is 25 percent worldwide and 40 percent in the United States.* Inaddition to corporate income taxes, some countries also (1) withhold taxes on dividends,interest, and royalties, (2) charge value-added taxes at specified production anddistribution points, and (3) impose border taxes such as customs and import duties. Wni-alitaned xs/ omoon in won soil*KPMG Corporate Tax Rate Survey (January 2009)ber 25xil dem SAT 320kBusin ses purchase many assets that have a very loprofiSIn 2013, Overnight earned profit before income taxes of $66,570 (see the income state-ment in Exhibit 5-2, page 198, in Chapter 5). Therefore, income taxes expense for the entireyear is estimated at $26,628 ($66,570 × 40 percent). Given that income taxes expenserecognized through 30 November amounts to $22,608 (see the unadjusted trial balancein Exhibit 4-2), an additional $4,020 in income taxes expense must have accrued duringBb Veond nitheexpense is:bersbrony Hssiosintogard blozS9TD eboog/smirorhdittoisuier coise los bossbong ghims bersigmon4,020 lavitodidaecember ($26,628 - $22,608). The adjusting entry to record thisesd 225plaud oni moqainOSTERSEN OG HU31 Dec.Income Taxes ExpenseTROLEU225302102,20Income Taxes PayableGLE219maizubiyet4,020isitAbstamitas Sd VinoDIEAdjusting entry to record income taxes accrued in December.ovo nishoo viestitalomallaugu ziraidh bhsignored if the dollar amo..This entry increases the balance in the Income Taxes Expense account to the $26,628year enamount required for thesidXBJShqxs XXS 5Vinkysh as to visos flat a time of any i miyear ended 31 December 2013. It also increases the liability forincome taxes payable to $5,580 ($1,560 + $4,020). The transaction to record the paymental mio bist and aSabqmod wolpin Ub Shri¹x Bin (ashunos olhos fil hovswol bonsq instio oli ni zal oil or gainaloi6 This assumption enables us toenables us to accrue income taxes in December in the same manner as in other months.Otherwise, income taxes for this month would be recorded as a mid-month transaction, rather than in anend-of-month adjusting entry. The adjusting entry for income taxes is an example of an accrued, but unpaid,Apizare:diexpense.H₂Dothniso tile220l xaOTHT-A tidid:SMOOTIOТИЗМЕТАТnoBuwAdjusting entincome taxes

Accepted Answer

Adjustment entries can be made at the end of year, at the end of month or end of quarter according…