Required: 1. Prepare an income statement for the month of June. Prepare a balance sheet at June 30, 2016. Note: You will need to determine the balance in Retained Earnings at th end of the month. 2. 3. The financial statements you have prepared are helpful, but in many ways, they are just a starting point. Assuming that this is your business, what additional questions do the financial statements raise that you need to consider?
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.
D1.
Account
![Greenway Corporation is organized on June 1, 2016. The company will provide lawn-care and tree-trimming services on a
contract basis. Following is an alphabetical list of the items that should appear on its income statement for the first month
and on its balance sheet at the end of the first month. (You will need to determine on which statement each should
appear.)
Accounts payable
Accounts receivable
Building
Capital stock
Cash
Gas, utilities, and other expenses
Land
Required:
1.
2.
$900
500
2,000
5,000 Salaries and wages expense
3,400 Tools
300 Tree-trimming revenue
4,000 Truck
Lawn-care revenue
$1,500
7,000
Notes payable
Retained earnings (beginning balance) 0
900
800
500
3,000
Prepare an income statement for the month of June.
Prepare a balance sheet at June 30, 2016. Note: You will need to determine the balance in Retained Earnings at the
end of the month.
3.
The financial statements you have prepared are helpful, but in many ways, they are just a starting point. Assuming
that this is your business, what additional questions do the financial statements raise that you need to consider?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32c0cfc8-ebc2-43a6-9c48-ae841504d819%2Fd07f9bd8-5279-4882-bb20-8f9e5b5388ee%2F0v4uymg_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 5 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Excel Applications for Accounting Principles](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Excel Applications for Accounting Principles](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781305088436/9781305088436_smallCoverImage.gif)