Miguel Rios acted upon his entrepreneurial spirit and started a graphic design business called Miguel’s Designs. Based on an excellent business plan, Miguel was able to raise sufficient capital to begin operations in October. During the month of October, the following events occurred related to the business. 1. Stockholders invested $40,000 cash in the business in exchange for common stock. 2. Paid $2,500 cash for rent on an office suite for the month of October. 3. Purchased two desktop computers, software, and a printer for $10,000 cash. 4. Purchased miscellaneous supplies for $500 that will be used during the month, all on account. 5. Purchased an advertisement in a local newspaper for $300 cash, announcing the opening of his new business. 6. Performed $ 7,800 of design work on account. 7.Received $3,500 cash from customers for design work previously completed.8.Paid $350 cash toward the company’s accounts payable balance.9.Paid $2,500 cash for wages of Miguel Rios. a. Record the October transactions of Miguel’s Designs in the transaction analysis template. Enter decreases in account balances as negative numbers. b. Show that the accounting equation is in balance at the end of October by entering the ending balances. Assets=Liabilities and EquityAnswer=Answer c. Prepare an unadjusted balance sheet and income statement as of October 31.
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.
Miguel Rios acted upon his entrepreneurial spirit and started a graphic design business called Miguel’s Designs. Based on an excellent business plan, Miguel was able to raise sufficient capital to begin operations in October. During the month of October, the following events occurred related to the business. 1. Stockholders invested $40,000 cash in the business in exchange for common stock. 2. Paid $2,500 cash for rent on an office suite for the month of October. 3. Purchased two desktop computers, software, and a printer for $10,000 cash. 4. Purchased miscellaneous supplies for $500 that will be used during the month, all on account. 5. Purchased an advertisement in a local newspaper for $300 cash, announcing the opening of his new business. 6. Performed $
7,800 of design work on account. 7.Received $3,500 cash from customers for design work previously completed.8.Paid $350 cash toward the company’s accounts payable balance.9.Paid $2,500 cash for wages of Miguel Rios.
a. Record the October transactions of Miguel’s Designs in the transaction analysis template.
Enter decreases in account balances as negative numbers.
b. Show that the
Assets=Liabilities and EquityAnswer=Answer
c. Prepare an unadjusted
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