During the month of October 20--, The Pink Petal flower shop engaged in the following transactions:
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.
During the month of October 20--, The Pink Petal flower shop engaged in the following transactions:
| Oct. 1 | Sold merchandise on account to Elizabeth Shoemaker, $1,000, plus tax of $50. Sale No. 222. |
| 2 | Issued Check No. 190 to Jill Hand in payment of October 1 balance of $500, less 2% discount. |
| 2 | Purchased merchandise on account from Flower Wholesalers, $4,000. Invoice No. 500, dated October 2, terms 2/10, n/30. |
| 4 | Purchased merchandise on account from Seidl Enterprises, $700. Invoice No. 527, dated October 4, terms 2/15, n/30. |
| 5 | Issued Check No. 191 in payment of phone expense for the month of September, $150. |
| 7 | Sold merchandise for cash, $3,500, plus tax of $175. |
| 9 | Received payment from Leigh Summers in full settlement of account, $2,000. |
| 11 | Issued Check No. 192 to Flower Wholesalers in payment of October 1 balance of $1,500. |
| 12 | Sold merchandise on account to Leigh Summers, $2,000, plus tax of $100. Sale No. 223. |
| 12 | Received payment from Meg Johnson on account, $3,100. |
| 13 | Issued Check No. 193 to Seidl Enterprises in payment of October 4 purchase. Invoice No. 527, less 2% discount. |
| 14 | Meg Johnson returned merchandise for a credit, $300, plus sales tax of $15. |
| 17 | Returned merchandise to Vases Etc. for credit, $900. |
| 24 | Received payment from David’s Decorating on account, $2,135. |
| 27 | Sold merchandise on account to David’s Decorating, $3,000, plus tax of $150. Sale No. 224. |
| 29 | Issued Check No. 194 in payment of wages (Wages Expense) for the four-week period ending October 30, $900. |
Selected account balances as of October 1 were as follows:
|
Account |
Account No. |
Debit |
Credit |
| Cash | 101 | $18,225 | |
| 122 | 9,619 | ||
| Accounts Payable | 202 | $5,120 |
The Pink Petal also had the following subsidiary ledger balances as of October 1:
Accounts Receivable:
|
Customer |
Accounts Receivable Balance |
| David’s Decorating 12 Jude Lane Hartford, CT 06117 | $3,340 |
| Elizabeth Shoemaker 52 Juniper Road Hartford, CT 06118 | 279 |
| Meg Johnson 700 Hobbes Dr. Avon, CT 06108 | 4,000 |
| Leigh Summers 5200 Hamilton Ave. Hartford, CT 06111 | 2,000 |
Accounts Payable:
|
Supplier |
Accounts Payable Balance |
| Vases Etc. 34 Harry Ave. East Hartford, CT 05234 | $3,120 |
| Jill Hand 1009 Drake Rd. Farmington, CT 06082 | 500 |
| Flower Wholesalers 43 Lucky Lane Bristol, CT 06007 | 1,500 |
| Seidl Enterprises 888 Anders Street Newington, CT 06789 | — |
Prepare The General Ledger.
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