Below are the transactions for Salukis Car Cleaning for June, the first month of operations. June 1 Obtain a loan of $70,000 from the bank by signing a note. June 2 Issue common stock in exchange for cash of $40,000. June 7 Purchase car wash equipment for $75,000 cash. June 10 Purchase cleaning supplies of $8,000 on account. June 12 Wash 500 cars for $10 each. All customers pay cash. June 16 Pay employees $900 for work performed. June 19 Pay for advertising in a local newspaper, costing $500. June 23 Wash 600 cars for $10 each on account. June 29 Pay employees $950 for work performed. June 30 A utility bill of $1,400 for the current month is paid. June 30 Pay dividends of $600 to stockholders. Required: 1. Record each transaction. 2. Post each transaction to the appropriate T-accounts. 3. Calculate the balance of each account. 4. Prepare a trial balance for June. Salukis uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Notes Payable, Common Stock, Dividends, Service Revenue, Salaries Expense, Advertising Expense, and Utilities Expense.
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.
Below are the transactions for Salukis Car Cleaning for June, the first month of operations.
June 1 Obtain a loan of $70,000 from the bank by signing a note.
June 2 Issue common stock in exchange for cash of $40,000.
June 7 Purchase car wash equipment for $75,000 cash.
June 10 Purchase cleaning supplies of $8,000 on account.
June 12 Wash 500 cars for $10 each. All customers pay cash.
June 16 Pay employees $900 for work performed.
June 19 Pay for advertising in a local newspaper, costing $500.
June 23 Wash 600 cars for $10 each on account.
June 29 Pay employees $950 for work performed.
June 30 A utility bill of $1,400 for the current month is paid.
June 30 Pay dividends of $600 to stockholders.
Required:
1. Record each transaction.
2.
3. Calculate the balance of each account.
4. Prepare a
Salukis uses the following accounts: Cash,
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 11 images
