General Journal Tab - For each transaction, prepare the required journal entry on the General Journal tab. List debits before credits. General Ledger Tab - One of the advantages of general ledger software is that posting is done automatically. To see the detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the General Ledger tab. Trial Balance Tab - General ledger software also automates the preparation of trial balances. A trial balance lists each account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total credits. Income Statement Tab - The revenue and expense balances from the trial balance appear on the income statement, along with their balance as of the date selected. Review the income statement and indicate how the income statement is linked to the other financial statements. Statement of Retained Earnings Tab - Beginning retained earnings plus (minus) net income (loss) for the period less dividends. Review the statement of Retained earnings and indicate how the statement is linked to the other financial statements. Balance Sheet Tab - Each asset and liability account balance, as reported on the trial balance, appears on the balance sheet, along with the equity balances. Review the balance sheet and then indicate how the balance sheet is linked to the other financial statements. Financial Statement Impact Tab It is important to be able to identify the impact each transaction has on the financial statements. For each of the transactions, indicate the cumulative amount of net income, total assets, total liabilities and total equity that would appear on the financial statements immediately after each transaction is recorded.
General Journal Tab - For each transaction, prepare the required journal entry on the General Journal tab. List debits before credits. General Ledger Tab - One of the advantages of general ledger software is that posting is done automatically. To see the detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the General Ledger tab. Trial Balance Tab - General ledger software also automates the preparation of trial balances. A trial balance lists each account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total credits. Income Statement Tab - The revenue and expense balances from the trial balance appear on the income statement, along with their balance as of the date selected. Review the income statement and indicate how the income statement is linked to the other financial statements. Statement of Retained Earnings Tab - Beginning retained earnings plus (minus) net income (loss) for the period less dividends. Review the statement of Retained earnings and indicate how the statement is linked to the other financial statements. Balance Sheet Tab - Each asset and liability account balance, as reported on the trial balance, appears on the balance sheet, along with the equity balances. Review the balance sheet and then indicate how the balance sheet is linked to the other financial statements. Financial Statement Impact Tab It is important to be able to identify the impact each transaction has on the financial statements. For each of the transactions, indicate the cumulative amount of net income, total assets, total liabilities and total equity that would appear on the financial statements immediately after each transaction is recorded.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
Transcribed Image Text:Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in its first month of
operations.
Prepare journal entries for each transaction and identify the financial statement impact of each entry.
The financial statements are automatically generated based on the journal entries recorded.
April 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
April 2 The company prepaid $9,000 cash for 12 months' rent for office space. The company's policy is to record prepaid expenses
in balance sheet accounts.
April 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10
days.
April 6 The company completed services for a client and immediately received $4,000 cash.
April 9 The company completed a $6,000 project for a client, who must pay within 30 days.
April 13 The company paid $11,600 cash to settle the account payable created on April 3.
April 19 The company paid $2,400 cash for the premium on a 12-month prepaid insurance policy. The company's policy is to record
prepaid expenses in balance sheet accounts.
April 22 The company received $4,400 cash as partial payment for the work completed on April 9.
April 25 The company completed work for another client for $2,890 on credit.
April 28 The company paid $5,500 cash in dividends.
April 29 The company purchased $600 of additional office supplies on credit.
April 30 The company paid $435 cash for this month's utility bill.
Requirement
General
Journal
General
Ledger
Trial Balance
Income St Retained
Statement Earnings
Balance Sheet FS Impact
General Journal Tab - For each transaction, prepare the required journal entry on the General Journal tab. List debits
before credits.
General Ledger Tab - One of the advantages of general ledger software is that posting is done automatically. To see the
detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the
General Ledger tab.
Trial Balance Tab - General ledger software also automates the preparation of trial balances. A trial balance lists each
account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total
credits.
credits.
Income Statement Tab - The revenue and expense balances from the trial balance appear on the income statement,
along
with their balance as of the date selected. Review the income statement and indicate how the income statement is
linked to the other financial statements.
Statement of Retained Earnings Tab - Beginning retained earnings plus (minus) net income (loss) for the period less
dividends. Review the statement of Retained earnings and indicate how the statement is linked to the other financial
statements.
Balance Sheet Tab - Each asset and liability account balance, as reported on the trial balance, appears on the balance
sheet, along with the equity balances. Review the balance sheet and then indicate how the balance sheet is linked to the
other financial statements.
Financial Statement Impact Tab It is important to be able to identify the impact each transaction has on the financial
statements. For each of the transactions, indicate the cumulative amount of net income, total assets, total liabilities and
total equity that would appear on the financial statements immediately after each transaction is recorded.
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