On 1 July 2018 Nicole Andreou opened a beauty parlour. The following transactions occurred during the first month of operations (ignore GST). Use the following account titles and numbers: Cash at Bank, 100; Accounts Receivable, 101; Supplies, 102; Equipment, 103; Loan Payable, 200; Nicole Andreou, Capital, 300; Nicole Andreou, Drawings, 301; Revenue, 400; Rent Expense, 500; Advertising Expense, 501; Insurance Expense, 502; Telephone Expense, 503. July 2 Andreou invested $120000 in the business by depositing cash into business cheque account with the Eastpac bank. 2 paid $1800 for the first month’s rent. 3 purchased equipment by an outline bank transfer for $32000 and signed a commercial loan agreement for 38000. 4 Purchased supplies for $8400. 6 Paid advertising expense of $890. 16 Recorded beauty services revenue for the first half of the month of $3250 in cash and $620 on credit. 20 Paid insurance expense for July of $480 using an online bank transfer. 23 Received a $140 payment form customers who paid on credit in the first half of the month. 28 Andreou withdrew of $560 cash for personal living expenses. 31 Recorded revenue for the second half of the month of $680 in cash and $580 on credit. 31 Paid telephone account of $330 by electronic transfer. Required: a) Prepare the general journal entries to record the above transactions. b) Post the entries from the general journal to the general ledger accounts (running balance format) and enter the posting references in the general journal. c) Prepare a trial balance as at 31 July 2018.
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.
On 1 July 2018 Nicole Andreou opened a beauty parlour. The following transactions occurred during the first month of operations (ignore GST).
Use the following account titles and numbers: Cash at Bank, 100;
July
2 Andreou invested $120000 in the business by depositing cash into business cheque account with the Eastpac bank.
2 paid $1800 for the first month’s rent.
3 purchased equipment by an outline bank transfer for $32000 and signed a commercial loan agreement for 38000.
4 Purchased supplies for $8400.
6 Paid advertising expense of $890.
16 Recorded beauty services revenue for the first half of the month of $3250 in cash and $620 on credit.
20 Paid insurance expense for July of $480 using an online bank transfer.
23 Received a $140 payment form customers who paid on credit in the first half of the month.
28 Andreou withdrew of $560 cash for personal living expenses.
31 Recorded revenue for the second half of the month of $680 in cash and $580 on credit.
31 Paid telephone account of $330 by electronic transfer.
Required:
- a) Prepare the general
journal entries to record the above transactions. - b)
Post the entries from the general journal to the general ledger accounts (running balance
format) and enter the posting references in the general journal.
- c) Prepare a
trial balance as at 31 July 2018.
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