Recording Transactions in T-Accounts and Preparing a Trial Balance On Oct. 1, 2021, Jackielyn Magpantay established City Laundry. The accountant listed the following accounts in the chart of accounts: Cash; Supplies; Prepaid Insurance; Laundry Equipment; Furniture and Fixtures; Accounts Payable; Magpantay, Capital;Magpantay, Withdrawals; Laundry Revenues; Salaries Expense; Rent Expense; Utilities Expense and Miscellaneous Expense. During October, the following transactions were completed: a. Magpantay deposited P192,000 in a bank account in the name of the business. b. Bought tables and chairs for cash, P12,960. c. Paid rent for the month, P6,950. d. Bought washers and dryers for P 163,000, giving P32,000 as down payment, with the remainder due in thirty days. e. Bought washing supplies on account from Juanita Rabena Distributors, P5,190. f. Received P17,960 from cash customers for the first half of the month. g. Paid P2,140 for a one-year liability insurance policy. h. Received and paid electric bill, P1,940. i. Paid P1,230 on account for the washing supplies acquired in transaction (e). j. Received P27,920 from cash customers for the second half of the month. k. Paid salaries to employees, P10,350. l . Magpantay withdrew cash for personal use, P9,500. Required: 1. Record the transactions directly into the T-accounts using the alphabets to identify each transaction. 2. Prepare a trial balance
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.
Problem #8
Recording Transactions in T-Accounts and Preparing a
On Oct. 1, 2021, Jackielyn Magpantay established City Laundry. The accountant listed the following accounts in the chart of accounts: Cash; Supplies; Prepaid Insurance; Laundry Equipment; Furniture and Fixtures; Accounts Payable; Magpantay, Capital;Magpantay, Withdrawals; Laundry Revenues; Salaries Expense; Rent Expense; Utilities
Expense and Miscellaneous Expense.
During October, the following transactions were completed:
a. Magpantay deposited P192,000 in a bank account in the name of the business.
b. Bought tables and chairs for cash, P12,960.
c. Paid rent for the month, P6,950.
d. Bought washers and dryers for P 163,000, giving P32,000 as down payment, with the
remainder due in thirty days.
e. Bought washing supplies on account from Juanita Rabena Distributors, P5,190.
f. Received P17,960 from cash customers for the first half of the month.
g. Paid P2,140 for a one-year liability insurance policy.
h. Received and paid electric bill, P1,940.
i. Paid P1,230 on account for the washing supplies acquired in transaction (e).
j. Received P27,920 from cash customers for the second half of the month.
k. Paid salaries to employees, P10,350.
l . Magpantay withdrew cash for personal use, P9,500.
Required:
1. Record the transactions directly into the T-accounts using the alphabets to identify
each transaction.
2. Prepare a trial balance.
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