Problem 1-8A Analyzing transactions and preparing financial statements LO6, 7, 8 George Littlechild started a new kitchen and bath design business called Littlechild Enterprises. The following activities occurred during its first month of operations, March 2023. a. Littlechild invested $200,000 cash and office equipment valued at $28,000 in the business. b. Purchased a small building for $680,000 to be used as an office. Paid $140,000 in cash and signed a note payable promising to pay the balance over several years. c. Purchased $3,800 of office supplies for cash d. Purchased $80,000 of office equipment on credit. e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2023. He will send a $1,800 deposit on July 1, 2023 f. Completed a project on credit and billed the client $6,000 for the work. g. Paid a local online newspaper $4,300 for an announcement that the office had opened. h. Completed a project for a client and collected $4,800 cash. i. Made a $4.800 payment on the equipment purchased in (d) J. Received $2,900 from the client described in () k. Paid $8,600 cash for the office secretary's wages. L.Littlechild withdrew $4.400 cash from the company bank account to pay personal living expenses. Required: 1. & 2. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation For each change in equity, select whether the change was caused by an investment, a revenue, an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance (Enter all amounts as positive values. If the transaction/event does not affect equity or does not require a journal entry, select "No Affect on Equity in the 'Explanation of equity transaction field.)
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.
Subject: acounting
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
