At the end of June 2018, the first month of operations, the following selected data were taken from the financial statements of Janet Matuguinas, CPA; Profit for June P 39,750 Total assets at June 30 189,700 Total liabilities at June 30 20,200 Total owner's equity for June 30 169,500 In preparing the financial statements, adjustments for the following are overlooked. a. Supplies used during June, P1,750. b. Unbilled fees earned at June 30, P2,900. c. Depreciation on equipment for June, P2,500. d. Accrued salaries at June 30, P1,500. Required: 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of profit for June and the total assets, liabilities, and owner's equity at June 30. Indicate the effect of each omitted adjustments by setting up and completing the columnar table below. Total Total Owner's Profit Assets Liabilities Equity Reported amounts P39,750 P189,700 P20,200 P169.500 Corrections: Adjustments (a) ________ ________ ________ ________ (b) ________ ________ ________ ________ (c) ________ ________ ________ ________ (d) ________ ________ ________ ________ Corrected amount
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.
At the end of June 2018, the first month of operations, the following selected data were taken from
the financial statements of Janet Matuguinas, CPA;
Profit for June P 39,750
Total assets at June 30 189,700
Total liabilities at June 30 20,200
Total owner's equity for June 30 169,500
In preparing the financial statements, adjustments for the following are overlooked.
a. Supplies used during June, P1,750.
b. Unbilled fees earned at June 30, P2,900.
c.
d. Accrued salaries at June 30, P1,500.
Required:
1.
2. Determine the correct amount of profit for June and the total assets, liabilities, and owner's equity
at June 30. Indicate the effect of each omitted adjustments by setting up and completing the columnar
table below.
Total Total Owner's
Profit Assets Liabilities Equity
Reported amounts P39,750 P189,700 P20,200 P169.500
Corrections:
Adjustments (a) ________ ________ ________ ________
(b) ________ ________ ________ ________
(c) ________ ________ ________ ________
(d) ________ ________ ________ ________
Corrected amount
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