: In proper order, journalize the following econmic activities (transactions), post the journal entries into the General Ledger (T-Accounts) & record the account balances, and prepare the Undajusted Trial Balnce for the month of January 2020. Be sure to lable your work appropriately. January 1 Issued common stock to Marjorie Knaus in exchange for $30,000. 4 Paid January rent for office and workroom, $2,500. 5 Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder. 8 Purchased office and computer equipment on account, $8,000. 8 Paid cash for supplies, $2,100. 12 Paid cash for annual insurance policies, $3,600. 18 Received cash from client for plans delivered, $9,000. 20 Paid cash for miscellaneous expenses, $2,600. 21 Paid cash to creditors on account, $4,000. 25 Paid installment due on note payable, $1,875. 26 Received invoice for blueprint service, due in February, $5,500. 27 Recorded fees earned on plans delivered, payment to be received in April, $31,400. 29 Paid salary of assistants, $6,000. 31 Paid gas, oil, and repairs on automobile for March, $1,300. Marjorie Knaus, Inc. General Ledger Cash (11) Accounts Receivable (12) Accounts Payable (21) Common Stock (31) Prepaid Insurance (15) Office Supplies (14) Wages Payable (22) Retained Earnings (33) Computer Equipment (16) Accumulated Depreciation - Computer Equipment (17) Notes Payable (25) Dividends (32) Automobile (18) Accumulated Depreciation - Automobile (19) Salaries Expense Service Revenue (41) Depreciation Expense - Computer Equipment (53) Depreciation Expense - Automobile (54) Rent Expense (57) Supplies Expense (51) Truck Expense (56) Miscellaneous Expense (58) Insurance Expense (52) Repair & Maintenance Expense (54)
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.
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| In proper order, journalize the following econmic activities (transactions), |
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| January | ||||||||||||||||||
| 1 | Issued common stock to Marjorie Knaus in exchange for $30,000. | |||||||||||||||||
| 4 | Paid January rent for office and workroom, $2,500. | |||||||||||||||||
| 5 | Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder. | |||||||||||||||||
| 8 | Purchased office and computer equipment on account, $8,000. | |||||||||||||||||
| 8 | Paid cash for supplies, $2,100. | |||||||||||||||||
| 12 | Paid cash for annual insurance policies, $3,600. | |||||||||||||||||
| 18 | Received cash from client for plans delivered, $9,000. | |||||||||||||||||
| 20 | Paid cash for miscellaneous expenses, $2,600. | |||||||||||||||||
| 21 | Paid cash to creditors on account, $4,000. | |||||||||||||||||
| 25 | Paid installment due on note payable, $1,875. | |||||||||||||||||
| 26 | Received invoice for blueprint service, due in February, $5,500. | |||||||||||||||||
| 27 | Recorded fees earned on plans delivered, payment to be received in April, $31,400. | |||||||||||||||||
| 29 | Paid salary of assistants, $6,000. | |||||||||||||||||
| 31 | Paid gas, oil, and repairs on automobile for March, $1,300. |
| Marjorie Knaus, Inc. | ||||||||||||||||||
| General Ledger | ||||||||||||||||||
| Cash (11) | Accounts Payable (21) | Common Stock (31) | ||||||||||||||||
| Prepaid Insurance (15) | Office Supplies (14) | Wages Payable (22) | ||||||||||||||||
| Computer Equipment (16) | Notes Payable (25) | Dividends (32) | ||||||||||||||||
| Automobile (18) | Accumulated Depreciation - Automobile (19) | Salaries Expense | Service Revenue (41) | |||||||||||||||
| Depreciation Expense - Computer Equipment (53) | Depreciation Expense - Automobile (54) | |||||||||||||||||
| Rent Expense (57) | Supplies Expense (51) | |||||||||||||||||
| Truck Expense (56) | Miscellaneous Expense (58) | Insurance Expense (52) | Repair & Maintenance Expense (54) | |||||||||||||||
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