On october 19, Jackson Kelin founded the Nasty Shop. The following actions completed during the month. 1- Jackson invested $ 80,000 in cash into the business in exchange for common shares. 2-Purchased whole shop equipment for $ 6500 cash 3- $ 3400 cash paid shop rent 4-Materials required for the shop were purchased for $ 1,500 5-Sold for $ 15,000 6-paid $ 2500 for the utilities 7-$ 6200 employees paid 8-Online sales for $ 3,000: $ 1500 cash has been received from the customer via the cash-on-delivery system and a balance of $1500 is billed to the customers' account. 9-$ 1500 paid for refunds 10-Incurred $150 of shipping costs in online sales, on account. 11-Paid the shipment amount due in transaction (10). 12-$ 13000 in cash was received from customers previously invoiced in transaction (8). 13.Declared and paid a $250 cash dividend. a) Journalize transactions in the period. b) Post the transaction to the general ledger c) Prepare the trial balance. d) Prepare the adjusting entries for the period e) Post the adjusting entries to the ledger accounts. f) Prepare an adjusted trial balance at December 31, 2020 e) Prepare the income statement and balance sheet of the company.
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.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 20 images
