King Sports owned by Tim Lane, sells sports equipment to schools and sporting clubs in Victoria. The following balances were reported in the Balance Sheet as at 30 June 2019. Account Name Balance ($) Cash at bank 39 400 Accounts receivable 2 800 Accounts payable 1 200 Capital – Tim Lane 41 000 Transactions for July 2019 were as follows: July 2 Received $2800 from accounts receivable 3 Paid $1000 of accounts payable 4 Paid rent for July $700 5 Sent invoice to customer $5600 7 Purchased office equipment for cash $2000 9 Recorded cash sales $800 10 Recorded credit sales $1500 14 Purchased office supplies for cash $330 23 Recorded cash sales $2000 31 Cash drawing by Tim Lane $800 Required: Part A: Record Journal entries for the business transactions for the month ended 31 July 2019.) Part B: Record the transactions in the following ledger accounts for King Sports for the month ended 31 July 2019. (i) Cash account. (ii) Accounts receivable. (iii) Office equipment. (iv) Rent expense. (v) Office supplies expense. (vi) Drawings account. (vii) Tim Lane’s capital account. (viii) Sales revenue account. Part C: c. Prepare a trial balance at 31 July 2019
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 3
King Sports owned by Tim Lane, sells sports equipment to schools and sporting clubs in Victoria.
The following balances were reported in the
Account Name Balance ($)
Cash at bank 39 400
Accounts payable 1 200
Capital – Tim Lane 41 000
Transactions for July 2019 were as follows:
July 2 Received $2800 from accounts receivable
3 Paid $1000 of accounts payable
4 Paid rent for July $700
5 Sent invoice to customer $5600
7 Purchased office equipment for cash $2000
9 Recorded cash sales $800
10 Recorded credit sales $1500
14 Purchased office supplies for cash $330
23 Recorded cash sales $2000
31 Cash drawing by Tim Lane $800
Required:
Part A:
Record
Part B:
Record the transactions in the following ledger accounts for King Sports for the month ended
31 July 2019.
(i) Cash account.
(ii) Accounts receivable.
(iii) Office equipment.
(iv) Rent expense.
(v) Office supplies expense.
(vi) Drawings account.
(vii) Tim Lane’s capital account.
(viii) Sales revenue account.
Part C:
c. Prepare a
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