Answer the following question. On 1st March 2020, Mr Alan Richardson began a business specialising in transportation and delivery services called Alan Movers. At the end of his first month of operations, Alan decides to prepare a financial statement to assess his business performance. Following are the events that occurs from 1st to 31st March 2020. March 1 – Alan invested $500,000 cash AND he purchased several used office equipment worth $100,000. Alan was told that the equipment was originally purchased 2 years ago at a value of $120,000. March 2 – Alan Movers paid $15,000 for the rental of his office premises. March 4 – He purchased several business equipment for $12,000 on 30-day credit. March 8 – Alan Movers completed a project from a client and collected $32,000 cash. March 10 – Alan Movers completed another project and sent a bill for $27,000 to his client for payment to be paid within 30 days. March 12 – Purchased another lifting equipment for $8,000 in cash. March 15 – Paid $6,200 half month’s salary in cash to his employees. March 18 – Alan Movers collected $15,000 from a client for an amount owed for his service. March 25 – Paid $12,000 in cash for the equipment which was purchased on credit. March 28 – Alan Richardson withdrew $500 cash for his personal use. March 30 – Completed another project for $40,000 but received only 50% upfront and the remaining amount to be paid in 7 days. March 31 – Paid $700 for his staff salary March 31 – Paid $1,800 for telephone bill and another $3,800 for utilities bill. April 2 – Received cash for $20,000 for project that were carried out on March 30. Required Prepare the journal entries, T-accounts, and Trial Balance of Alan Movers for a period from 1 March to 31 March 2020
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.
Answer the following question.
On 1st March 2020, Mr Alan Richardson began a business specialising in transportation and delivery services called Alan Movers. At the end of his first month of operations, Alan decides to prepare a financial statement to assess his business performance. Following are the events that occurs from 1st to 31st March 2020.
March 1 – Alan invested $500,000 cash AND he purchased several used office equipment worth $100,000. Alan was told that the equipment was originally purchased 2 years ago at a value of $120,000.
March 2 – Alan Movers paid $15,000 for the rental of his office premises.
March 4 – He purchased several business equipment for $12,000 on 30-day credit.
March 8 – Alan Movers completed a project from a client and collected $32,000 cash.
March 10 – Alan Movers completed another project and sent a bill for $27,000 to his client for payment to be paid within 30 days.
March 12 – Purchased another lifting equipment for $8,000 in cash.
March 15 – Paid $6,200 half month’s salary in cash to his employees.
March 18 – Alan Movers collected $15,000 from a client for an amount owed for his service.
March 25 – Paid $12,000 in cash for the equipment which was purchased on credit.
March 28 – Alan Richardson withdrew $500 cash for his personal use.
March 30 – Completed another project for $40,000 but received only 50% upfront and the remaining amount to be paid in 7 days.
March 31 – Paid $700 for his staff salary
March 31 – Paid $1,800 for telephone bill and another $3,800 for utilities bill.
April 2 – Received cash for $20,000 for project that were carried out on March 30.
Required
Prepare the
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