he accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019.Transactions: Guttery invested $80,000 in cash to start the business. Paid $3,000 for the current month’s rent. Bought office furniture for $8,360 in cash. Performed services for $4,100 in cash. Paid $625 for the monthly telephone bill. Performed services for $7,000 on credit. Purchased a computer and copier for $19,000; paid $6,500 in cash immediately with the balance due in 30 days. Received $3,500 from credit clients. Paid $2,000 in cash for office cleaning services for the month. Purchased additional office chairs for $2,900; received credit terms of 30 days. Purchased office equipment for $20,000 and paid half of this amount in cash immediately; the balance is due in 30 days. Issued a check for $4,700 to pay salaries. Performed services for $7,250 in cash. Performed services for $8,000 on credit. Collected $4,000 on accounts receivable from charge customers. Issued a check for $1,450 in partial payment of the amount owed for office chairs. Paid $350 to a duplicating company for photocopy work performed during the month. Paid $610 for the monthly electric bill. Guttery withdrew $4,500 in cash for personal expenses. Required:Prepare a trial balance, an income statement, a statement of owner’s equity, and a balance sheet. Assume that the transactions took place during the month ended June 30, 2019. Determine the account balances before you start work on the financial statements. Analyze:What is the change in owner’s equity for the month of June?
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.
he accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019.
Transactions:
- Guttery invested $80,000 in cash to start the business.
- Paid $3,000 for the current month’s rent.
- Bought office furniture for $8,360 in cash.
- Performed services for $4,100 in cash.
- Paid $625 for the monthly telephone bill.
- Performed services for $7,000 on credit.
- Purchased a computer and copier for $19,000; paid $6,500 in cash immediately with the balance due in 30 days.
- Received $3,500 from credit clients.
- Paid $2,000 in cash for office cleaning services for the month.
- Purchased additional office chairs for $2,900; received credit terms of 30 days.
- Purchased office equipment for $20,000 and paid half of this amount in cash immediately; the balance is due in 30 days.
- Issued a check for $4,700 to pay salaries.
- Performed services for $7,250 in cash.
- Performed services for $8,000 on credit.
- Collected $4,000 on
accounts receivable from charge customers. - Issued a check for $1,450 in partial payment of the amount owed for office chairs.
- Paid $350 to a duplicating company for photocopy work performed during the month.
- Paid $610 for the monthly electric bill.
- Guttery withdrew $4,500 in cash for personal expenses.
Required:
Prepare a
Analyze:
What is the change in owner’s equity for the month of June?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
