14. Cely Kalaw started a new business in advertising called the Straight and Truc Advertising The following are the transactions for February which you are required to summarize using the format you did in Exercise no. 13. Extract the balances only after the last transaction. Use the following accounts and provide a money column for cach: Cash. Art Supplies, Office Supplies, Equipment, Furniture and Fixtures. Accounts Payable, Notes Payable and Kalaw, Capital. 5 Cely transferred half of her P300,000 personal savings to the account of the business. She purchased and paid P15,000 in cash for supplies such as illustration boards, art papers, and coloring materials. 9 16 She purchased photo equipment at a cost of P105,000 from Camera Work. She paid one third and issued a note promising to pay before the end of the month. 20 A friend, Lisa, bought a fax machine a year ago for P10,000. She sold this to Cely less a discount of P4,000. Cely promised to pay her after thirty days. 22 She purchased paper for the fax machine and paid cash of P1,500. 25 She purchased furniture and fixtures from Ideal Furniture Store on credit for P8,000 28 She paid another one third of the account owing to Camera Work
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.
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2. Prepare Financial Position
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