Question 1 You are the accountant for Emma's Electronics Ltd., a brand new company and have been given the following transactions to record. All transactions occurred during the first month of operations in May 2022. The company policy is to present any products to be sold as an inventory asset, not an expense. Date May 1/22 May 3/22 May 3/22 May 4/22 Description Issued shares in exchange for $125,000 cash. Purchased land and building for $52,000 cash (Land value is $12,000 and building is $40,000) Purchased equipment for $33,000 using a bank loan. Purchased materials (inventory) on account for $26,300
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 1
2 You are the accountant for Emma's Electronics Ltd., a brand new company and have been given the following transactions to
B record. All transactions occurred during the first month of operations in May 2022. The company policy is to present any products
4 to be sold as an inventory asset, not an expense.
5
6 Date
7 May 1/22
8 May 3/22
9
10 May 3/22
11 May 4/22
12 May 5/22
13 May 6/22
14 May 8/22
15
16 May 12/22
17 May 15/22
18 May 20/22
19 May 22/22
20 May 23/22
21 May 28/22
22 May 31/22
CH2
Description
Issued shares in exchange for $125,000 cash.
Purchased land and building for $52,000 cash (Land value is $12,000 and building is $40,000)
Purchased equipment for $33,000 using a bank loan.
Purchased materials (inventory) on account for $26,300
Purchased materials (inventory) for cash of $17,300
Paid equipment rent for the month of 5,000 using cash.
Purchased the following expenses on account: Advertising $3,120; Office expenses $1,250; Utilities $2,830
A customer orders goods for $43,200 on account.
A cash payment of $16,300 is made towards the supplies purchased on May 4/22
The customer who purchased on account on May 12/22, pays cash on their account balance of $15,200
Goods are sold for $51,400 cash.
A loan payment is made for $3,300 cash.
A dividend is declared and paid by cash in the amount of $15,000
Wages of $9,450 are paid using cash.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F490a9595-d5f1-4cf2-a91a-5c38599b15d4%2F3060c35e-166b-4788-b85c-e6b9c810544e%2Fh92r3ef_processed.jpeg&w=3840&q=75)
![May 31/22
Required:
Wages of $9,450 are paid using cash.
mnounc di y,000
1 Prepare journal entries for all of the above transactions and include a brief description.
2 Post all transactions to the T-accounts (names have been provided) and add the proper heading to the page.
3 Using the T-accounts (or journal entries) prepare the trial balance for Emma's Electronics Ltd. as of May 31,
2022. Include a proper heading.
4 What is the net income at the end of May?
4A Opening retained earnings is zero, what are retained earnings on May 31/22?
48 What are the total assets as of May 31/22?
4C What are the total liabilities as of May 31/22?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F490a9595-d5f1-4cf2-a91a-5c38599b15d4%2F3060c35e-166b-4788-b85c-e6b9c810544e%2F4k9zwpu_processed.png&w=3840&q=75)
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