Murphy's Sweets, which began as a hot dog stand in 2001, now has more than 200 locations worldwide. The following is adapted from Murphy's Sweets's financial statements for the quarter ended June 26, 2019. Dollars are reported in millions. Accounts Payable Accounts Receivable Cash Common Stock Equipment Intangible Assets Inventory Notes Payable (long-term) Notes Payable (short-term) Prepaid Rent Retained Earnings Short-Term Investments Assume that the following events occurred in the following quarter, which ended September 26, 2019. a. Paid $1,400 cash for additional intangible assets. b. Issued additional shares of common stock for $10,800 in cash. Debit c. Purchased equipment; paid $4,800 in cash and signed additional long-term loans for $9,700. d. Paid $880 cash for accounts payable owed at September 26. e. Conducted negotiations to purchase a farm, which is expected to cost $8,700. Beginning Balance 4. Summarize the journal entry effects from part 3 using T-accounts. (Enter your answers in millions (1.e., 10,000,000 should be entered as 10).) Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Beginning Balance Ending Balance Debit Notes Payable (short-term) Debit Beginning Balance Cash Ending Balance Inventory Prepaid Rent Intangible Assets Common Stock Credit Credit Credit $ 5,150 680 Credit 2,960 438 Credit 4,180 3,250 1,510 2,060 1,678 610 4,548 748 Credit Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Debit Beginning Balance Ending Balance Beginning Balance Ending Balance Short-term Investments Notes Payable (long-term) Debit Debit Beginning Balance Accounts Receivable Ending Balance Equipment Accounts Payable Retained Earnings Credit Credit Credit Credit Credit Credit
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.
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