M2-13 (Algo) Identifying Transactions and Preparing Journal Entries [LO 2-3] J.K. Builders was incorporated on July 1. The following are the company's transactions for the month of July. a. Received $83,000 cash invested by owners and issued common stock. b. Bought an unused field from a local farmer by paying $73,000 cash. As a construction site for smaller projects, it is estimated to be worth $78,000 to J.K. Builders. c. A lumber supplier delivered lumber supplies to J.K. Builders for future use. The lumber supplies would have normally sold for $23,000, but the supplier gave J.K. Builders a 10 percent discount. J.K. Builders has not yet received the $20,700 bill from the supplier. d. Borrowed $38,000 from the bank with a plan to use the funds to build a small workshop in August. The loan must be repaid in two years. e. One of the owners sold $23,000 worth of his common stock to another shareholder for $24,000. Required: Prepare journal entries for the above transactions from the first month of business. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 2 3 4 5 Transaction a b C d e Cash Common Stock Land Cash Supplies Answer is complete but not entirely correct. Accounts Payable Cash Common Stock Notes Payable (long-term) General Journal Common Stock Cash ✓ ✓ X X Debit 83,000✔ 73,000✔ 20,700 38,000✔ 24,000 Credit 83,000 73,000 20,700 38,000 23,000 X 1,000 X
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.
![M2-13 (Algo) Identifying Transactions and Preparing Journal Entries [LO 2-3]
J.K. Builders was incorporated on July 1. The following are the company's transactions for the month of July.
a. Received $83,000 cash invested by owners and issued common stock.
b. Bought an unused field from a local farmer by paying $73,000 cash. As a construction site for smaller projects, it is estimated to be
worth $78,000 to J.K. Builders.
c. A lumber supplier delivered lumber supplies to J.K. Builders for future use. The lumber supplies would have normally sold for
$23,000, but the supplier gave J.K. Builders a 10 percent discount. J.K. Builders has not yet received the $20,700 bill from the
supplier.
d. Borrowed $38,000 from the bank with a plan to use the funds to build a small workshop in August. The loan must be repaid in two
years.
e. One of the owners sold $23,000 worth of his common stock to another shareholder for $24,000.
Required:
Prepare journal entries for the above transactions from the first month of business. (If no entry is required for a transaction/event,
select "No Journal Entry Required" in the first account field.)
No
1
2
3
4
5
Transaction
a
b
с
d
e
Cash
Common Stock
Land
Cash
Supplies
Answer is complete but not entirely correct.
General Journal
Accounts Payable
Cash
Notes Payable (long-term)
Common Stock
Common Stock
Cash
>
X
X
Debit
83,000
73,000
20,700
38,000
24,000
Credit
83,000
73,000
20,700
38,000
23,000 X
1,000 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3cbc1f2-6a00-461f-bed3-e3696bbf2ae9%2F791f7100-c8e7-45b5-9aae-ec94a4e01114%2F3x3ghp6_processed.jpeg&w=3840&q=75)
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