Question 1 Jade started her own consulting firm, Jade Consulting Pty Ltd. This company and all suppliers are registered for GST. The relevant transactions below include GST at the rate of 10%. At 1 October 2020. Jade Consulting had the following account balances: Share capital (60,000 shares issued for $3 each) $ 180,000 General reserve Retained earnings Cash Land 25,000 90,000 45,000 250,000 The following transactions occurred during the month of October. Oct 1 Existing shareholders purchased 4,000 shares @ $3 each for cash on a special offer 2 3 5 9 12 15 Performed $6,600 of services on account 17 Paid $3,200 for employee salaries after PAYG withheld tax of $590 Paid for the supplies purchased on account on 3 20 October 23 Received a cash payment of $5,600 for services provided on account on 15 October 26 Borrowed $10,000 from the bank 29 Paid $990 for office rent for the month Purchased $660 of supplies on account Paid $110 to advertise in the Daily News Received $4,422 cash for service provided Paid $500 cash dividend Purchased office equipment for $3,520 on account Paid $220 for electricity 30 30 Revalued the land to its fair value of $325,000 Declared a cash dividend of $0.05 per share, payable on 30 November 2020. 31 Required a) Journalise the transactions in the general journal (ignore narrations). b) Prepared a Statement of Comprehensive Income at 31 October. Explain the differences between a Statement of Profit or Loss and a Statement of Comprehensive Income c) Prepare a Statement of Financial Position at 31 October 2020.
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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