Activity 3: The following are transactions of Juana dela Cruz Company for the month of May, 2021. The company uses Periodic Inventory System and a Non-Vat registered business. May, 2021 Date Transactions 1 Juana dela Cruz invested the following assets in his business: P500,000 cash; P60,000 worth of desks and chairs and a store equipment valued P25,000. Ms. Dela Cruz' accounts payable to Mr. Arellano amounting to P10,000 is to be assumed by his business. 2 Ms. Dela Cruz bought computer for her business worth P50,000 giving a P10,000 downpayment and the balance payable at the end of the month. 3 Purchased merchandise for cash, P15,000 4 Purchased merchandise from LM Store, P20,000 terms 2/10, n/3 5 Purchased office supplies on account, P3,500. 6 Sold merchandise to Mr. Alex on account, P35,000 terms 2/10, n/30 FOB destination. 7 Paid advertising for the month, P5,000. 8 Purchased merchandise from PS Company, P25,000, terms 1/15, n/30. 9 Cash sales, P20,000 10 Received a credit for P1,500 from PS Company as an allowance for slight defect on merchandise purchased. 12 Sold merchandise to Ms. Ranlie on account, P44,000, terms 2/10, n/30, FOB destination. Paid freight on sale made to Ms. Ranlie, P1,150. 13 14 Issued check to LM Store in full payment for the May 4, account. 18 Sold merchandise to Mr. MJ, P35,000, terms 60-day, a 6% note was received from Mr. MJ. Collected the amount due from Mr. Alex for his May 6, account. 21 22 Received payment from Ms. Ranlie. 23 Paid the amount due to PS Company. 31 Paid the May 2, invoice. Required: Journalize the transactions on the books of Juana dela Cruz Company. Show supporting computations.
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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