Payable Transactions Richmond Company engaged in the following transactions during 2013: Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31. Paid for 25% of the purchased merchandise (Transaction a) on February 26. On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note. Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30. Purchased $78,000 of merchandise on June 4. Amount due in full on June 30. Paid for the purchased merchandise (Transaction e) on June 24. Received from Haywood Inc. on August 19, a $22,000 deposit against a total selling price of $220,000 for services to be performed for Haywood. Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each): On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $198,000 is due on January 31. Required: Hide 1. Prepare journal entries for these transactions. If an amount box does not require an entry, leave it blank. a. Feb. 16 (Record purchase of supplies on account) b. Feb. 26 (Record partial payment of supplier) c. Mar. 31 (Record issuance of note to cover unpaid portion of account payable) d. Apr. 30 (Record issuance of note) e. June 4 (Record purchase of inventory on account) f. June 24 (Record payment of supplier) g. Aug. 19 (Record receipt of deposit for services not yet performed) h. Oct. 15 (Record employer payroll taxes) i. Dec. 15 (Record recognition of revenue) Hide 2. Prepare any adjusting entries necessary at December 31, 2013. Dec. 31 (Record accrued interest)
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.
Payable Transactions
Richmond Company engaged in the following transactions during 2013:
- Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.
- Paid for 25% of the purchased merchandise (Transaction a) on February 26.
- On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.
- Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.
- Purchased $78,000 of merchandise on June 4. Amount due in full on June 30.
- Paid for the purchased merchandise (Transaction e) on June 24.
- Received from Haywood Inc. on August 19, a $22,000 deposit against a total selling price of $220,000 for services to be performed for Haywood.
- Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each):
- On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $198,000 is due on January 31.
Required:
1. Prepare
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2. Prepare any
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