Instructions: Javier started a business that is dedicated to the preparation of land for construction. Below are the transactions made during the past month. Make Jornal entries for each transaction and T accounts for each account. Use the “Chart of Accounts” attached a) On the first day of the month Javier opened a bank account in the name of the business; in which I deposit $25,000 b) $600 is paid in cash for the month's rent. c) A used truck was purchased for $8,000 in cash. d) $3,000 tools were purchased on credit at Home-Depot. e) $150 was paid in cash for the use of electricity. f) $1,500 was paid in advance in cash for 2 years insurance for the truck. g) Customers paid the business $3,000 in cash for services received. h) Pay $700 salary to an employee. i) Javier prepares a plot of land and the client makes a cash payment of $2,500 and he has a debt of $1,000. j) Pay $35 of the phone bill. k) Javier buys $300 worth of office equipment. Pay $100 in cash and take a credit for the remaining $200. l) Of the money owed by the client in letter i, the client pays $500. m) Javier pays $850 salary to an employee. n) Javier pays $1,000 for the tools purchased in letter d. o) The presented business $2,000 more in income; of which they received $1,400 in cash and $600 remains to be collected. p) The owner withdraws $500 from the business account for his personal use.
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.
Instructions: Javier started a business that is dedicated to the preparation of land for construction. Below are the transactions made during the past month. Make Jornal entries for each transaction and T accounts for each account. Use the “Chart of Accounts” attached
a) On the first day of the month Javier opened a bank account in the name of the business; in which I deposit $25,000
b) $600 is paid in cash for the month's rent.
c) A used truck was purchased for $8,000 in cash.
d) $3,000 tools were purchased on credit at Home-Depot.
e) $150 was paid in cash for the use of electricity.
f) $1,500 was paid in advance in cash for 2 years insurance for the truck.
g) Customers paid the business $3,000 in cash for services received.
h) Pay $700 salary to an employee.
i) Javier prepares a plot of land and the client makes a cash payment of $2,500 and he has a debt of $1,000.
j) Pay $35 of the phone bill.
k) Javier buys $300 worth of office equipment. Pay $100 in cash and take a credit for the remaining $200.
l) Of the money owed by the client in letter i, the client pays $500.
m) Javier pays $850 salary to an employee.
n) Javier pays $1,000 for the tools purchased in letter d.
o) The presented business $2,000 more in income; of which they received $1,400 in cash and $600 remains to be collected.
p) The owner withdraws $500 from the business account for his personal use.
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