Prepare the journal entries for the Hampton Corporation (a newly-formed service company) in the general journal provided. Aug 1 Opened a business bank account with a deposit of $50,000 in exchange for issued common stock
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.
| Required: | |||||||||
| Prepare the |
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| Aug | 1 | Opened a business bank account with a deposit of $50,000 in exchange for issued common stock. | |||||||
| 3 | Purchased $2,000 of supplies on account to be used next month. | ||||||||
| 6 | Purchased a parcel of land for $20,000. | ||||||||
| 8 | Completed a consulting job and billed client $5,000. | ||||||||
| 11 | Paid rent of $1,500 on office equipment for the month. | ||||||||
| 14 | Paid half of the balance due on the supplies purchased on the 3rd. | ||||||||
| 15 | Paid office salaries, $3,500. | ||||||||
| 17 | Received $6,000 in advance from a customer for a job to be performed in September. | ||||||||
| 21 | Collected fees of $4,000 for a consulting job completed today. | ||||||||
| 23 | Collected $3,000 of the amount billed on August 8. | ||||||||
| 27 | Paid the telephone expense, $500. | ||||||||
| 31 | Paid $600 for an advertising promotion. |
| General Journal | ||||||||||
| Date | Account | Debit | Credit | |||||||
| Aug 1 | Cash | 50,000 | 4 | |||||||
| Common Stock | 50,000 | 1 | ||||||||
| 1 | ||||||||||
| Aug 3 | Supplies | 2,000 | 4 | |||||||
| Accounts Payable | 2,000 | 1 | ||||||||
| 0 | ||||||||||
| Aug 6 | 20,000 | 3 | ||||||||
| Cash | 20,000 | 1 | ||||||||
| 1 | ||||||||||
| Aug 8 | Accounts Payable | 5,000 | 3 | |||||||
| 5,000 | 0 | |||||||||
| 0 | ||||||||||
| Aug 11 | 1,500 | 3 | ||||||||
| Cash | 1,500 | 1 | ||||||||
| 0 | ||||||||||
| Aug 14 | 1,000 | 3 | ||||||||
| Cash | 1,000 | 1 | ||||||||
| 0 | ||||||||||
| Aug 15 | 3,500 | 3 | ||||||||
| Cash | 3,500 | 1 | ||||||||
| 1 | ||||||||||
| Aug 17 | Cash | 6,000 | 4 | |||||||
| Unearned Revenue | 6,000 | 1 | ||||||||
| 1 | ||||||||||
| Aug 21 | Cash | 4,000 | 3 | |||||||
| 4,000 | 0 | |||||||||
| 1 | ||||||||||
| Aug 23 | Cash | 3,000 | 4 | |||||||
| 3,000 | 1 | |||||||||
| 0 | ||||||||||
| Aug 27 | 500 | 3 | ||||||||
| Cash | 500 | 1 | ||||||||
| 1 | ||||||||||
| Aug 31 | Advertising Expense | 600 | 4 | |||||||
| Cash | 600 | 1 | ||||||||
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