Prepare the Journal Entries and Trial Balance for Wendy Winger. Set up the T–accounts for the following: Cash Accounts Receivable Airplane Accounts Payable Notes Payable Wendy Winger, Capital Wendy Winger, Withdrawals Service Revenue Rent Expense Maintenance Expense Fuel Expense Flight Insurance Expense Wages Expense Wendy Winger opened an aerial photography service called Wendy’s Winged Views. Below are the company’s transactions for March, 2016. Mar 1 Wendy Winger invested Cash in the business, $60,000 2 Wendy purchased an airplane for $220,000, $40,000 was the down payment, she signed a note for the rest 3 4 Paid Woodrow Airport $2,500 to rent hangar space for the month 5 6 Earned $8,300 in revenue on account by taking aerial pictures of a circus 7 8 Paid her employees $5,800 9 14 Paid Hangar Handyman Services $1,900 for maintenance and repairs on airplane 15 17 Collected $4,900 of what was owed from transaction of Mar 6 18 19 Earned $16,000 in revenue for aerial pictures of a celebrity wedding. She was paid that day. 20 21 Paid her employees $5,800 23 Purchased $3,000 of fuel for plane on account 24 25 Paid $4,000 in flight insurance for the month of March. 26 30 Winger withdrew $2,000 for personal use Required: a. Journalize and Post Transactions b. Prepare Trial Balance
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.
Prepare the
Set up the T–accounts for the following:
Cash
Accounts Receivable
Airplane
Accounts Payable
Notes Payable
Wendy Winger, Capital
Wendy Winger, Withdrawals
Service Revenue
Rent Expense
Maintenance Expense
Fuel Expense
Flight Insurance Expense
Wages Expense
Wendy Winger opened an aerial photography service called Wendy’s
Winged Views. Below are the company’s transactions for March, 2016.
Mar 1 Wendy Winger invested Cash in the business, $60,000
2 Wendy purchased an airplane for $220,000, $40,000 was the down payment,
she signed a note for the rest
3
4 Paid Woodrow Airport $2,500 to rent hangar space for the month
5
6 Earned $8,300 in revenue on account by taking aerial pictures of a circus
7
8 Paid her employees $5,800
9
14 Paid Hangar Handyman Services $1,900 for maintenance and repairs on
airplane
15
17 Collected $4,900 of what was owed from transaction of Mar 6
18
19 Earned $16,000 in revenue for aerial pictures of a celebrity wedding. She
was paid that day.
20
21 Paid her employees $5,800
23 Purchased $3,000 of fuel for plane on account
24
25 Paid $4,000 in flight insurance for the month of March.
26
30 Winger withdrew $2,000 for personal use
Required:
a. Journalize and Post Transactions
b. Prepare Trial Balance
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