Directions: Below are the economic transaction of Garcia’s Car Accessories and Services. Aug. 1 Garcia invested P48,000 cash in the business. 1 Rented office space and paid P800 cash for the August rent. 3 Purchased exploration equipment for P22,000 by paying P12,000 cash and agreeing to pay the balance in 3 months. 5 Purchased office supplies by paying P1,500 cash. 6 Completed exploration work and immediately collected P420 cash for the work. 8 Purchased P1,350 of office equipment on credit. 15 Completed exploration work on credit in the amount of P8,000. 18 Purchased P700 of office supplies on credit. 20 Paid cash for the office equipment purchased on August 8. 24 Billed a client P2,400 for work completed; the balance is due in 30 days. 28 Received P5,000 cash for the work completed on August 15. 30 Paid the assistant’s salary of P1,100 cash for this month. 30 Paid P340 cash for this month’s utility bill. 30 Garcia withdrew P1,050 cash from the business for personal use. Required: a. Record the above transaction using the accounting equation. b. Solve for the following: b.1. Total Assets b.2. Total Liabilities b.3. Total Capital b.4. Total Revenue b.5. Total Expenses
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.
Directions: Below are the economic transaction of Garcia’s Car Accessories and Services.
Aug. 1 Garcia invested P48,000 cash in the business.
1 Rented office space and paid P800 cash for the August rent.
3 Purchased exploration equipment for P22,000 by paying P12,000
cash and agreeing to pay the balance in 3 months.
5 Purchased office supplies by paying P1,500 cash.
6 Completed exploration work and immediately collected P420 cash for the
work.
8 Purchased P1,350 of office equipment on credit.
15 Completed exploration work on credit in the amount of P8,000.
18 Purchased P700 of office supplies on credit.
20 Paid cash for the office equipment purchased on August 8.
24 Billed a client P2,400 for work completed; the balance is due in 30 days.
28 Received P5,000 cash for the work completed on August 15.
30 Paid the assistant’s salary of P1,100 cash for this month.
30 Paid P340 cash for this month’s utility bill.
30 Garcia withdrew P1,050 cash from the business for personal use.
Required:
a. Record the above transaction using the
b. Solve for the following:
b.1. Total Assets
b.2. Total Liabilities
b.3. Total Capital
b.4. Total Revenue
b.5. Total Expenses
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