Choice Chicken Company was organized on January 1. At the end of the first quarter (three months) of operations, the owner prepared a summary of its activities as shown in transaction (a) of the following table: Required: 1. For each of the six transactions given in this tabulation, enter what you consider to be the correct amounts. The first transaction is illustrated. Note: Amounts to be deducted and losses/outflows should be indicated with a minus sign. Summary of Transactions a Services performed for customers, $118,000, of which $20,500 remained uncollected at the end of the quarter $ b.Cash borrowed from the local bank, $30,500 (one-year note). c. Small service truck purchased at the end of the quarter to be used in the business for two years starting the next quarter: Cost, $13,500 cash. d. Wages earned by employees, $47,000, of which one-fifth remained unpaid at the end of the quarter. e. Service supplies purchased for use in the business, $9,500 cash, of which $3,200 were unused (still on hand) at the end of the quarter. t. Other operating expenses, $42.000, of which one-half remained unpaid at the end of the quarter. 9. Based only on these transactions, compute the following for the quarter. Income (or loss) Cash inflow (or outflow) Computation of Income 118,000 $ Cash 97,500
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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