1. Chart of Accounts 2. Comparative 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.
Instructions:
Using both periodic and perpetual inventory system, you are required to prepare the following:
1. Chart of Accounts
2. Comparative
![ABM Sales Company engaged in the following transactions for the month of March 2021
1-Mar Anna Wiecka withdrew P 350,000 from her bank account and invested it in
the business. She also made an initial investment of merchandise worth P 150,000.
2-Mar Purchased office supplies worth P 1,850 using cash
4-Mar Paid one (1) year insurance premiums, P 8,500.
Purchased merchandise from BGN Trading, P 135,000
Terms: 20% down, balance 2/10, n/30. FOB Destination, Freight collect, P 3,300.
6-Mar Purchased computer set from SJ Store P 35,000 on account, for office Use.
7-Mar Purchased merchandise from SJDJ Trading, P 95,000.
Terms: 5-10, 2/15, n/30. FOB SP, Freight Collect, P 720.
9-Mar Sold merchandise to SEAS Trading, P 105,000 (cost, P 85,000)
Terms 5-5, 2/15, 1/20, n/30. FOB Destination, Freight prepaid, P 825.
12-Mar Returned defective merchandise purchased from BGN Trading, P 5,500.
15-Mar Paid BGN Trading in full
18-Mar Sold merchandise to SPC Trading, P 65,000 (cost, P 49,750)
Terms: 2/20, n/30, FOB Destination, Freight collect, P 1,500
20-Mar SEAS Trading returned defective merchandise worth P 12,750
(cost, P 8,950)
21-Mar Received partial payment from SPC Trading, P 15,000.00
21-Mar Anna Wiecka withdrew P 12,000 for personal use.
24-Mar SEAS Trading settled its account in full
25-Mar Anna Wiecka temporarily withdrew P 5,000 worth of merchandise for personal use.
28-Mar SPC Trading settled its account in full.
30-Mar Settled account with SJDJ Trading in full.
30-Mar Paid the following expenses: Salaries - 10,000; Utilities - P 3,000;
Advertising - P 3,240; Rent - P 8,500
31-Mar Purchased merchandise from SHS Company P 50,000 cash
Terms: FOB shipping point, Freight Prepaid, P 2,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb0d35e2e-ffda-4cff-85ef-6d5ddc337a4d%2Fa2a52023-ba58-4d14-b030-600e76d4090c%2F07l0g3_processed.png&w=3840&q=75)
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