B. By using the format provided below, indicate the effects of the following transaction on the assets, liabilities and owner's equity of Teresa's ENT Clin Place () sign for minus figure. Extract the balances only after the last transaction. Prepare a statement of Financial Condition. May-01 Teresa Sison, a doctor, invested P100,000 cash and medical equipment worth P500,000 to put up a clinic. May-05 Purchased furniture worth P20,000 from Xavier's Furnishing Home. Paid 50% with the balance payable after 30 days May-06 Hired a nurse for a monthly salary of P10,000 May-07 Returned a defective chair purchased on May 5. A credit memo was received reducing the account by P1,500. May-08 Withdrew cash from the business funds to purchase medical supplies needed by the business, P5,000. May-09 Purchase a car for personal use. Paid 50,000 from her personal cash and issued a promissory note for P150,000. May-10 Applied for a business loan from PNB. Signed a promissory note for P100,000. May-17 The loan was approved and the cash received from the bank deposited in the name of the clinic. May-19 Half of the loan was used for the expansion of the clinic. May-24 Paid cash of P75,000 for electronic equipment bought. ASSETS LIABILITIES OWNER'S EQUITY Cash Supplie Equipment Furniture Leasehold Sison, Capital Accounts Notes STATEMENT OF FINANCIAL POSITION
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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