Record Transactions Lidia is looking to open another brick-and-mortar shop, but is not sure if she has the funding or the staff to handle another store. Prepare a tabular summary for Lidia of the following transactions for the months of June, July, and August. Be sure to include explanations for any revenues or expenses recorded. Include only one totals line at the end of August (after recording all transactions). Use the provided templates to complete your work. June 1 Lidia invested $10,000 cash in the business as owner’s capital 2 Paid $1,200 cash for June building rent 3 Purchased furniture for $3,300 cash 3 Paid $650 for supplies 4 Obtains $20,000 cash loan from the bank, due in 6 months plus 6% interest 5 Incurred $250 of advertising costs in the Albuquerque Journal on account 7 Received $4,700 in cash from Mr. Ortega for prepaid consulting services 13 Paid $250 cash for advertising costs incurred on June 5 15 Paid $2,500 for merchandise inventory 17 Purchased computers for the office for $1,850 cash 22 Hired two part-time employees and agreed to pay them $15 an hour for 20 hours a week starting in July 25 Received $3,300 in cash from Ms. Black for prepaid consulting services 29 Purchased $1,200 merchandise inventory on account 30 ADJ: Incurred $200 worth of utilities expense to be paid in July 30 ADJ: Consulted with Mr. Ortega and earned 50% of his prepayment from June 7 30 ADJ: Counted supplies and only $400 worth remains 30 ADJ: Incurs one month of interest on bank loan due upon maturity of note
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.
A. Record Transactions
Lidia is looking to open another brick-and-mortar shop, but is not sure if she has the
funding or the staff to handle another store. Prepare a tabular summary for Lidia of the
following transactions for the months of June, July, and August. Be sure to include
explanations for any revenues or expenses recorded. Include only one totals line at the
end of August (after recording all transactions). Use the provided templates to complete
your work.
June
1 Lidia invested $10,000 cash in the business as owner’s capital
2 Paid $1,200 cash for June building rent
3 Purchased furniture for $3,300 cash
3 Paid $650 for supplies
4 Obtains $20,000 cash loan from the bank, due in 6 months plus 6% interest
5 Incurred $250 of advertising costs in the Albuquerque Journal on account
7 Received $4,700 in cash from Mr. Ortega for prepaid consulting services
13 Paid $250 cash for advertising costs incurred on June 5
15 Paid $2,500 for merchandise inventory
17 Purchased computers for the office for $1,850 cash
22 Hired two part-time employees and agreed to pay them $15 an hour for 20 hours
a week starting in July
25 Received $3,300 in cash from Ms. Black for prepaid consulting services
29 Purchased $1,200 merchandise inventory on account
30 ADJ: Incurred $200 worth of utilities expense to be paid in July
30 ADJ: Consulted with Mr. Ortega and earned 50% of his prepayment from June 7
30 ADJ: Counted supplies and only $400 worth remains
30 ADJ: Incurs one month of interest on bank loan due upon maturity of note
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