Problem 5 Terminator Transaction Analysis and Trial Balance Argenald Conners owns Terminator Corp., a firm providing third-person relationship breakups. On July 1, the business's general ledger showed the following normal account balances: Cash Accounts receivable Total Assets $14,500 9,800 Required a. $24,300 Accounts payable Notes payable Common stock Retained earnings Total liabilities and Stockholders' Equity The following transactions occurred during the month of July: 1. Paid July rent, $670. 2. Collected $8,100 on account from customers. $2,100 7,000 11,200 4,000 $24,300 3. Paid $3,500 installment due on the $7,000 noninterest-bearing note payable to a relative. 4. Billed customers for termination services rendered on account, $21,000. 5. Rendered termination services and collected from cash customers, $1,400. 6. Paid $1,900 to creditors on account. 7. Collected $16,500 on account from customers. 8. Paid a delivery service for delivery of a breakup specialist in a box (to reach a reclusive target), $400. 9. Paid July salaries, $4,600. 10. Received invoice for July advertising expense, to be paid in August, $675. 11. Paid utilities for July, $350. 12. The business paid a $2,000 cash dividend. 13. Received invoice for supplies used in July, to be paid in August, $975. 14. Purchased a computer for $4,300 cash to be used in the business starting next month. Set up accounts for the general ledger accounts with July 1 balances and enter the beginning balances. Also provide the following accounts: Equipment; Dividends; Termination Revenue; Rent Expense; Salaries Expense; Delivery Expense; Advertising Expense; Utilities Expense; and Supplies Expense. Prepare journal entries and record the listed transactions in the appropriate T- accounts. b. Prepare a trial balance as of July 31.
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.
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