3. Show the effects of the journal entries by account, using T-accounts.
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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[The following information applies to the questions displayed below.]
Laser Delivery Services, Incorporated (LDS), was incorporated January 1. The following transactions occurred during the
year:
a.
a. Received $40,000 cash from the company's founders in exchange for common stock.
b. Purchased land for $12,000, signing a two-year note (ignore interest).
c. Bought two used delivery trucks at the start of the year at a cost of $10,000 each; paid $2,000 cash and signed a note
due in three years for $18,000 (ignore interest).
d. Paid $2,000 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks.
e. Stockholder Jonah Lee paid $300,000 cash for a house for his personal use.
3. Show the effects of the journal entries by account, using T-accounts.
Beginning
Balance
Ending Balance
Beginning
Balance
b.
Debit
Beginning
Balance
Ending Balance
Debit
0✓
✓ 40,000✔
Ending Balance
Cash
Debit
36,000
Land
0✓
✓ 12.000 ✓
12,000
Common Stock
Credit
2,000✔ C.
2,000 d.
Credit
Credit
0✓
40,000 a.
40,000
> Answer is complete but not entirely correct.
✓
Debit
Beginning Balance
C.
d.
d.
Ending Balance
Debit
Beginning Balance
Ending Balance
✓
X
Equipment
0♥
2,000 X
2,000
18,000 X
22,000
Notes Payable
Credit
Credit
0✔
12,000
18,000
30,000
b.
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