Jan 1. A group of investors provide $50,000 to IcanDoThis Inc. in exchange for Common Stock. Jan 2 IcanDoThis Inc. Pays $4,500 for January, February, and March rent. Jan. 3 IcanDoThis Inc. purchases $5,000 of equipment and pays half with cash and the rest on account. Jan. 4 IcanDoThis Inc. purchases $10,000 of inventory on credit. Jan 8 IcanDoThis Inc. sells inventory to customers for $9,000. The cost of the inventory is $3,000. Jan 12 IcanDoThis Inc. sells inventory to customers for $6,000. The cost of the inventory is $2,000. The customer IcanDoThis Inc. next week. Jan 15 IcanDoThis Inc. purchases supplies on account for $2,500. The supplies will be used over the next 3 month= Jan 20 IcanDoThis Inc. receives $6,000 cash from the Jan. 12th sale. Jan 22 IcanDoThis Inc. pays $2,500 for the supplies purchased on Jan 15. Jan 23 IcanDoThis Inc. A telephone bill in the amount of $117 covering Jan charges is unpaid at Jan 31 Jan 24 IcanDoThis Inc. Pays wages of $500 and utilities of $250 for January. Jan 31 IcanDoThis Inc. pays dividends of $300 to the stockholders. Jan 31 IcanDoThis Inc's utility expense for January was incurred but not paid prior to Jan. 31st totaled $520. Jan 31 IcanDoThis Inc. owed their employees $1,900 in wages that will be paid on Sept 1st. Jan 31 Supplies were counted at the end of the period and there were $2,000 supplies on hand. Jan 31 The equipment purchased on January 5th has no salvage value. IcanDoThis Inc. will use it for 5 years. Round nearest dollar. Interest is $500 per month.
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.
Prepare Closing Entries
Step by step
Solved in 2 steps
