Obj. 5 Seth Feye established Reliance Financial Services on July 1, 20Y2. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July follow: Assets - Liabilities + Stockholders'Equity Accounts Accounts Common Fees Salaries Rent Auto Supplies Misc Cash + Receivable + Supplies = Payable + Stock - Dividends + Earned - Expense - Expense - Expense - Expense - Expense +50,000 +50,000 a b. +7,000 +7,000 Bal 50,000 7,000 7,000 50,000 -3,600 -3,600 46,400 d +110,000 Bal 156,400 Bal. 7,000 3,400 50,000 +110,000 7,000 3,400 50,000 110,000 -33,000 -33,000 Bal. 123,400 7,000 3,400 5000 110,000 -33,000 -16,000 -16,000 -20,800 -4,800 Bal 102,600 7,000 3,400 50,000 110,000 -33,000 -4,800 9. -55,000 -55,000 Bal. 47,600 3,400 -55,000 - 33,000 -16,000 --4,800 7,000 -4,500 50,000 110,000 -4500 -4,500 h. 110,000 + 34,500 Bal 47,600 2,500 3,400 50,000 -55,000 -33,000 -16,000 -4,800 +34,500 Bal 3,400 -55,000 - 33,000 -16,000 -4,500 -4,800 47,600 -15,000 34,500 2,500 50,000 144,500 -15,000 32,600 34,500 2,500 50,000 -15,000 144,500 -16.000 Bal 3,400 -55,000 -33,000 -4,500 -4,800 Instructions 1. Prepare an income statement for the month ended July 31, 20Y2. Answer 2. Prepare a statement of stockholders' equity for the month ended July 31, 20Y2. 3. Prepare a balance sheet as of July 31, 20Y2. 4. (Optional) Prepare a statement of cash flows for the month ending July 31, 20Y2.
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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Preparing a classified
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Prepare an income statement for the year ended December 31, 20Y5.
AnswerCheck Figure: Net income, $137,400
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Prepare a statement of
stockholders’ equity for the year ended December 31, 20Y5. During the year, common stock of $25,000 was issued. -
Prepare a balance sheet as of December 31, 20Y5.
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Based upon the end-of-period spreadsheet, journalize the closing entries.
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Prepare a post-closing trial balance
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