A. Cotton serviced for P75,000, on account. She mistakenly recorded the promise to pay as 57,000 to Notes Receivable. B. The Notes payable was issued on 3/1/20, payable after 2 years. C. Notes receivable was received on 10/1/21 and is payable semi-annually for the next 2 years. Interest rate was twice of the Notes payable. D. Supplies amounted to P100,000 on 1/1/21. 69% of total Supplies were used at year-end. No purchases of supplies were made during the year. E. Cotton is under a 2-year rent contract amounting to P720,000 since 1/1/2021. She will pay P180,000 at the end of every quarter, starting March 31, 2021, until the full price is paid. Cotton's last record related to this transaction was on September 30, 2021. F. Cotton availed a 4-year P576,000 fire insurance last 8/1/20. G. Equipment was purchased on 6/1/20. It is estimated that it could be sold for P123,000 at the end of its useful life. H. Cotton failed to record a P300,000 service that she rendered. As of 12/31/21, only 80% of this balance has been collected. (Collections related to this transaction were not recorded as well) I. For 2021, Cotton started off with 4 employees with monthly salaries of P15,000 each. After 3 months, she hired an additional 3 employees with a payment cut-off salary of P10,000. Payment of salaries is made every 15th and last day of the month. I 5% of total Accounts Receivable is expected to be uncollectible
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.
7.) How much was recorded to Rent Expense on December 31, 2021?
Step by step
Solved in 2 steps
