Quality Service Inc. has the following accounts balances in their charts of accounts balances as at June 1, 2020: Cash $138,000; Accounts receivable $0; Land $ 30,000; Building $0; Supplies $0; Accounts payable $0; Notes payable $0; Quality-capital $70,000; Service revenue $98,000; Utilities, salary expense $0. The company also presented the following transactions for the month: June 1. Purchased supplies for $1000 on account June 4. Purchased a building for, $62,100 cash June 6. Performed service for a client on account, $12,000 June 10. Borrowed $7,000 cash, signing a note payable June 13. Paid the liability from June 1 June 17. Sold for $15,000 land that had cost this same amount June 21. Received $8000 cash from June 10 transaction June 30. Paid utilities expense of $600 and salary expense $2,500 Requirements: State the effect each transaction from June 1st -30th will have on the accounting equation. For example, the transaction increased asset and increased capital; the transaction increased expenses and decreased cash; the transaction increased asset and decreased asset; etc. Prepare the journal entries with narrations to record the transactions for “June” Post the transactions recorded in your journal to their respective “T” accounts and balance off each account at June 30th, 2020. Having determined the account balances, represent this information using the expanded accounting equation.
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.
Question:
Quality Service Inc. has the following accounts balances in their charts of accounts balances as at June 1, 2020:
Cash $138,000;
The company also presented the following transactions for the month:
June 1. Purchased supplies for $1000 on account
June 4. Purchased a building for, $62,100 cash
June 6. Performed service for a client on account, $12,000
June 10. Borrowed $7,000 cash, signing a note payable
June 13. Paid the liability from June 1
June 17. Sold for $15,000 land that had cost this same amount
June 21. Received $8000 cash from June 10 transaction
June 30. Paid utilities expense of $600 and salary expense $2,500
Requirements:
- State the effect each transaction from June 1st -30th will have on the
accounting equation. For example, the transaction increased asset and increased capital; the transaction increased expenses and decreased cash; the transaction increased asset and decreased asset; etc. - Prepare the
journal entries with narrations to record thetransactions for “June” - Post the transactions recorded in your journal to their respective “T” accounts and balance off each account at June 30th, 2020.
- Having determined the account balances, represent this information using the
expanded accounting equation .
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