Alex Vera organized Succulent Epress at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions: a. Terry Mason invested $30,000 in Succulent Express in exchange for common stock. b. Paid $5,400 on February 1 for an insurance premium on a one-year policy. c. Purchased supplies on account, $1,800. d. Received fees of $57,000 during February. e. Paid expenses as follows: wages, $21,600; rent, $6,400; utilities, $2,800; and miscellaneous, $3,200. f. Paid dividends of $8,000. Part 1: Record the preceding transactions using the integrated financial statement framework. After each transaction, you should enter a balance for each item. Part 2: Record the adjustments at the end of February to record the insurance expense and supplies expense. There was $300 of supplies on hand as of February 28. Identify the adjustment for insurance as (a1) and supplies as (a2). Enter the Net income under the Income Statement column after recording both adjustments. Part 3: Prepare all financial statements for February, including income statement
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.
| Alex Vera organized Succulent Epress at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions: | |||||||||||
| a. Terry Mason invested $30,000 in Succulent Express in exchange for common stock. | |||||||||||
| b. Paid $5,400 on February 1 for an insurance premium on a one-year policy. | |||||||||||
| c. Purchased supplies on account, $1,800. | |||||||||||
| d. Received fees of $57,000 during February. | |||||||||||
| e. Paid expenses as follows: wages, $21,600; rent, $6,400; utilities, $2,800; and miscellaneous, $3,200. | |||||||||||
| f. Paid dividends of $8,000. | |||||||||||
| Part 1: | |||||||||||
| Record the preceding transactions using the integrated financial statement framework. | |||||||||||
| After each transaction, you should enter a balance for each item. | |||||||||||
| Part 2: | |||||||||||
| Record the adjustments at the end of February to record the insurance expense and supplies expense. There was $300 of supplies on hand as of February 28. | |||||||||||
| Identify the adjustment for insurance as (a1) and supplies as (a2). | |||||||||||
| Enter the Net income under the Income Statement column after recording both adjustments. | |||||||||||
| Part 3: | |||||||||||
| Prepare all financial statements for February, including income statement, statement of |
Part 1:
Integrated financial framework:
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