Dec. 1, 2021, Lovell Abello ventured into a billiards recreation business, Balls and Sticks. During the month, the following transactions occurred: Dec. 1 3 10 14 20 24 30 Abello began the business by depositing P200,000 cash in a bank account in the name of the business. Purchased an existing billiard hall at a price of P210,000 for the land and P300,000 for the building. Abello paid the former owner P100,000 in cash and issued a short-term notes payable for the balance of the purchase price. Bought 10 billiard tables for P10,000 each, paying P60,000 cash and agreeing to pay the balance in 30 days. Sold a billiard table to the owner for P10,000. The entity was paid P5,000 cash and the balance within 30 days. Paid P20,000 of the amount owed on the billiard tables. Collected P2,000 on the billiard table sold. Purchased one used billiard table from another billiard hall, paying P6,000 cash. Required: Record the transactions for the month of December 2021 using a financial transaction worksheet. Indicate the new account balances after each transaction. Use the following accounts: Cash; Accounts Receivable; Land; Building; Billiard Tables; Notes Payable; Accounts Payable; and Abello, Capital.
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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