Prepare a tabular analysis of the above transactions. Include margin explanations for any changes in Retained Earnings. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-4 for example.) SAGE HILL INC. Liabilities Stockholders' Equity Assets Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Common Stock Retained Earnings Dividends Revenues Expenses 2$ $4 2$ $4 24 2$ 2$ (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Prepare a tabular analysis of the above transactions. Include margin explanations for any changes in Retained Earnings. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-4 for example.) SAGE HILL INC. Stockholders' Equity Liabilities Assets + Supplies + Equipment = Accounts Payable + Common Stock Retained Earnings + Accounts Receivable Cash Dividends Revenues Expenses 2$ 2$ 2$ $4 $4 2$ 24 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
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 April 1, Sage Hill Inc. was established. These transactions were completed during the month.
| 1. | Stockholders invested $30,600 cash in the company in exchange for common stock. | |
| 2. | Paid $870 cash for April office rent. | |
| 3. | Purchased office equipment for $2,980 cash. | |
| 4. | Purchased $140 of advertising in the Chicago Tribune, on account. | |
| 5. | Paid $350 cash for office supplies. | |
| 6. | Performed services worth $12,700. Cash of $3,400 is received from customers, and the balance of $9,300 is billed to customers on account. | |
| 7. | Paid $400 cash dividends. | |
| 8. | Paid Chicago Tribune amount due in transaction (4). | |
| 9. | Paid employees’ salaries $1,380. | |
| 10. | Received $9,300 in cash from customers billed previously in transaction (6). |
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