On July 1, K Resser opened Resser’s Business Services. Accountant listed the following chart of accounts: Cash Supplies Prepaid Insurance Equipment Furniture and Fixtures Accounts Payable K Resser, Capital K Resser, Drawing Business Services Revenue Wages Expense Rent Expense Utilities Expense Miscellaneous Expense The following transactions were completed during July: Resser deposited $25,000 in a bank account in the name of the business. Bought fables and chairs for cash, $125, Ck. No. 1200. Paid the rent for the current month. $1.750, Ck. No. 1201. Bought computers and copy machines from Ferber Equipment, $15,700, paying $4,000 in cash and placing the balance on account, CK No. 1202. Bought supplies on account from Wiggins’s Distributors, $535. Sold services for cash, $1742. Bought insurance for one year, $1,375, Ck. No. | 203. Paid on account to Ferber Equipment, $700, Ck. No. 1204. Received and paid the electric bill, $438, Ck. No. | 205. Paid on account to Distributors, $315, Ck. No. 1206. Sold services to customers for cash for the second half of the month, $820. Received and paid the bill for the business license, $75, Ck. No. 1207. Paid wages to an employee, $1,200, Ck. No. 1208. Resser withdrew cash for personal use, $700, Ck. No. 1209. Check Figure: $23,399 K. Resser, Capital July 31, 20__ Required: Record the owner's name in the Capital and Drawing T accounts. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the account. Record the transactions in the T accounts. Write the letter of each entry to the transaction. Foot the T accounts and show the balances. Prepare a trial balance as of July 31, 20--. Prepare an income statement for July 31, 20--. Prepare a statement owner's equity for July 31, 20--. Prepare a balance sheet as of July 31, 20--.
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.
- Resser deposited $25,000 in a bank account in the name of the business.
- Bought fables and chairs for cash, $125, Ck. No. 1200.
- Paid the rent for the current month. $1.750, Ck. No. 1201.
- Bought computers and copy machines from Ferber Equipment, $15,700, paying $4,000 in cash and placing the balance on account, CK No. 1202.
- Bought supplies on account from Wiggins’s Distributors, $535.
- Sold services for cash, $1742.
- Bought insurance for one year, $1,375, Ck. No. | 203.
- Paid on account to Ferber Equipment, $700, Ck. No. 1204.
- Received and paid the electric bill, $438, Ck. No. | 205.
- Paid on account to Distributors, $315, Ck. No. 1206.
- Sold services to customers for cash for the second half of the month, $820.
- Received and paid the bill for the business license, $75, Ck. No. 1207.
- Paid wages to an employee, $1,200, Ck. No. 1208.
- Resser withdrew cash for personal use, $700, Ck. No. 1209.
- Record the owner's name in the Capital and Drawing T accounts.
- Correctly place the plus and minus signs for each T account and label the debit and credit sides of the account.
- Record the transactions in the T accounts. Write the letter of each entry to the transaction.
- Foot the T accounts and show the balances.
- Prepare a
trial balance as of July 31, 20--. - Prepare an income statement for July 31, 20--.
- Prepare a statement owner's equity for July 31, 20--.
- Prepare a
balance sheet as of July 31, 20--.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
