The adjusted trial balance is an internal document and is not a financial statement which is prepared in order to match the balances of the general ledger. It is made before the preparation of financial statements by which each entry can be posted in proper statement.
The balance sheet is a statement of assets, liabilities and stockholders' equity of a company at a particular point of time.
1.Accounts payables are short term payments which the firm owes to its creditors. It includes those payments made by the firm within one year.
Therefore, it would be reported into the current liability section of the balance sheet.
2.Accounts Receivables are short-term receipts, which the firm has to receive from its debtors.
Therefore, it would be reported into current asset section of the balance sheet.
3.Accumulated depreciation on building is that amount of a building's cost that has been allocated to depreciation expense since the building was used for business purposes. It is deducted from the total amount of building and building is an asset of the company, which is recorded under property, plant and equipment.
Therefore, accumulated depreciation on building would be reported into the 'property, plant and equipment' section of the balance sheet.
4.Cash is the most liquid of all assets. It is used to purchase goods and services or to eliminate obligations.
Therefore, cash is a current asset, which will be reported into current asset section of the balance sheet.
5.Common stock refers to the security that represents ownership in a corporation. It is a part of equity capital of the firm which can never be redeemed and is lost if the firm fails in future.
Therefore, it would be reported into stockholder's equity section of balance sheet.
6.Notes payable (due in 10 years)
Notes payable refers to the general ledger account in which the firm records the face amount of the promissory notes that it has issued.If the amount due within one year then it would be recorded under current liability section of balance sheet and if the amount not due within one year or it is more than one year then it would be recorded under long-term liability section of balance sheet.
Therefore, Notes payable (due in 10 years) would be reported into long-term liability section of balance sheet.
Supplies refer to the cost of consumables used within a short span of time. Unused supplies are recorded into balance sheet under current assets while used supplies are recorded into income statement as expense. Since in the question there is no option of income statement.
Therefore, the supplies would be the unused supplies, which would be reported into the current asset section of balance sheet.
Wages payable refers to a current liability account which records the amount of wages that are owed to employees for the work, which was performed by them in prior periods.
Therefore, wages payable, which would be reported under current liability section of balance sheet.
Unadjusted trial balance
It is not a complete accurate trial balance. This trial balance is made to determine whether any error is there in the posting of debit and credit balances in the ledger. It only ensures that the debit side of the trial balance and the credit side is equal. It does not ensures the accuracy of trial balance for all other errors.
The income statement includes all the income and expenses that incur in period. By analyzing the trial balance given in the problem the income and expenses are recognized. Income Statement of T Consulting as on October 31, 2018 is prepared as shown below.
Retained Earnings Statement of Taser Consulting as on October 31, 2018 is prepared as it is shown below.
Balance sheet is prepared by taking the balances from the adjusted trial balance. In the present case the balances are given in the spreadsheet and the retained earning balance is taken from the statement of retained earnings. The Balance sheet of Triton Consulting as on October 30, 2018 is recorded as follows.
A current liability is one that will be due within one year or less and that are expected to be paid out of current assets (accounts payable, notes payable). Long-term liabilities are liabilities that will not be due for a long time, usually over a year.