Among the ledger accounts used by Glenwood Speedway are the following: Prepaid Rent, Rent Expense, Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Concessions Receivable, and concessions Revenue. For each of the following items, write first the journal entry (if one is needed) to record the external transaction and second the adjusting entry, if any, require don May31, the end of the fiscal year. i) On May1, borrowed $300,000 cash from National Bank by issuing a 12% note payable due in three months. ii) On May1, paid rent for six months beginning May1 at $30,000 per month. iii) On May 2, sold season tickets for a total of $910,000 cash. The season includes 70 racing days 20 in May 25 in June, and 25 in July. iv) On May4, an agreement was reached with Snack-Bars, Inc., allowing that company to sell refreshment at the track in return for 10% of the gross receipts from refreshment sales. v) On May 6, schedules for the 20 racing days in May and the first 10 racing days in June were printed and paid for at a cost of $12,000. vi) On May 31, Snack-Bars, Inc., reported that the gross receipts from refreshment sales in May had been $165,000 and that the 10% owed to Glenwood Speedway would be remitted on June 10.
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.
Among the ledger accounts used by Glenwood Speedway are the following: Prepaid Rent, Rent Expense, Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Concessions Receivable, and concessions Revenue. For each of the following items, write first the
i) On May1, borrowed $300,000 cash from National Bank by issuing a 12% note payable due in three months.
ii) On May1, paid rent for six months beginning May1 at $30,000 per month.
iii) On May 2, sold season tickets for a total of $910,000 cash. The season includes 70 racing days 20 in May 25 in June, and 25 in July.
iv) On May4, an agreement was reached with Snack-Bars, Inc., allowing that company to sell refreshment at the track in return for 10% of the gross receipts from refreshment sales.
v) On May 6, schedules for the 20 racing days in May and the first 10 racing days in June were printed and paid for at a cost of $12,000.
vi) On May 31, Snack-Bars, Inc., reported that the gross receipts from refreshment sales in May had been $165,000 and that the 10% owed to Glenwood Speedway would be remitted on June 10.
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