a. The firm was organized and the initial stockholders invested cash of $780. b. The company borrowed $1,170 from a relative of one of the initial stockholders; a short-term note was signed. c. Two zero-tur lawn mowers costing $624 each and a professional trimmer costing $169 were purchased for cash. The original list price of each mower was $793, but a discount was received because the seller was having a sale. d. Gasoline, oil, and several packages of trash bags were purchased for cash of $117. e. Advertising flyers announcing the formation of the business and a newspaper ad were purchased. The cost of these items, $221, will be paid in 30 days. f. During the first two weeks of operations, 47 lawns were mowed. The total revenue for this work was $917; $605 was collected in cash, and the balance will be received within 30 days. g.Employees were paid $546 for their work during the first two weeks. h.Additional gasoline, oil, and trash bags costing $143 were purchased for cash. i. In the last two weeks of the first month, revenues totaled $1,196, of which $488 was collected. j. Employee wages for the last two weeks totaled $663; these will be paid during the first week of the next month. k. It was determined that at the end of the month the cost of the gasoline, oil, and trash bags still on hand was $39. L. Customers paid a total of $195 due from mowing services provided during the first two weeks. The revenue for these services was recognized in transaction Prepare the journal entries for above of the transactions.
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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