Enter the following transactions in the General Journal starting on page 3. Assume balance day is on 30 June 2017 in each of the following circumstances: A 12-month insurance policy on office equipment had been taken out on 1 March 2017. An amount of $600 was paid on that date. We have received rent for the premises of $5400. This is received annually in June but only applies to the next accounting period. A 12-month insurance policy on a building was taken out on 1 April 2017. The annual premium of $6300 was due immediately but will only be paid on 1 July 2017. A 6-month advertising contract was signed on 30 April 2017. An amount of $3000 was paid on that date A 4-month advertising contract was signed and will take effect on 31 March 2017. $600 for this contract will be paid on 30 July 2017. Commission has been received but not yet earned $500 Rent on equipment of $6000 is paid annually, in arrears, on 30 September. 4 month’s rent had been paid in advance on 30 April 2017. The yearly rental was $2400. A business made an advertising contract with radio station. The radio station agreed to play 20 commercials at a cost of $900 per commercial. All commercials were paid for before the first commercial was played on air. Up to balance date only 8 commercials had been played on air. An investment of $15000 incurs interest at 10%pa received in November each year. Interest is owing at 30 June 2017 for the period from 30 November 2016. A bill for electricity is received quarterly. We receive the bill in July 2017 for the months ending 30 July, $225. An order from a client of $4000 has been paid for but only half of the goods have been delivered up to balance day. The full revenue has been recorded and therefore half must be recorded as unearned (ignore GST for this exercise) The employees of a business are paid a total of $1000 wages for working a five-day week. Payday is Monday of each week. The employees are paid for all work completed up to and including payday. Balance day falls on a Thursday this year. The employees of a business are paid a total of $1600 wages for working a five-day week. Payday is Thursday of each week. The employees are paid for all work completed up to and including payday. Balance day falls on a Monday this year. A business invested $6000 in government bonds on 1 March 2017. Interest is payable at the rate of 10% pa and the first interest payment is due to be received on 1 August 2017. A business invested $3000 in government bonds on 1 Feb 2017. Interest is payable at the rate of 10% pa and the first interest payment is due to be received on 1 August 2017. The accounts receivable balance on 30 June 2017 is $45890. Provide for doubtful debts at 5% of the total accounts receivable.
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.
Enter the following transactions in the General Journal starting on page 3. Assume balance day is on 30 June 2017 in each of the following circumstances:
- A 12-month insurance policy on office equipment had been taken out on 1 March 2017. An amount of $600 was paid on that date.
- We have received rent for the premises of $5400. This is received annually in June but only applies to the next accounting period.
- A 12-month insurance policy on a building was taken out on 1 April 2017. The annual premium of $6300 was due immediately but will only be paid on 1 July 2017.
- A 6-month advertising contract was signed on 30 April 2017. An amount of $3000 was paid on that date
- A 4-month advertising contract was signed and will take effect on 31 March 2017. $600 for this contract will be paid on 30 July 2017.
- Commission has been received but not yet earned $500
- Rent on equipment of $6000 is paid annually, in arrears, on 30 September.
- 4 month’s rent had been paid in advance on 30 April 2017. The yearly rental was $2400.
- A business made an advertising contract with radio station. The radio station agreed to play 20 commercials at a cost of $900 per commercial. All commercials were paid for before the first commercial was played on air. Up to balance date only 8 commercials had been played on air.
- An investment of $15000 incurs interest at 10%pa received in November each year. Interest is owing at 30 June 2017 for the period from 30 November 2016.
- A bill for electricity is received quarterly. We receive the bill in July 2017 for the months ending 30 July, $225.
- An order from a client of $4000 has been paid for but only half of the goods have been delivered up to balance day. The full revenue has been recorded and therefore half must be recorded as unearned (ignore GST for this exercise)
- The employees of a business are paid a total of $1000 wages for working a five-day week. Payday is Monday of each week. The employees are paid for all work completed up to and including payday. Balance day falls on a Thursday this year.
- The employees of a business are paid a total of $1600 wages for working a five-day week. Payday is Thursday of each week. The employees are paid for all work completed up to and including payday. Balance day falls on a Monday this year.
- A business invested $6000 in government bonds on 1 March 2017. Interest is payable at the rate of 10% pa and the first interest payment is due to be received on 1 August 2017.
- A business invested $3000 in government bonds on 1 Feb 2017. Interest is payable at the rate of 10% pa and the first interest payment is due to be received on 1 August 2017.
- The
accounts receivable balance on 30 June 2017 is $45890. Provide for doubtful debts at 5% of the total accounts receivable.
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