REQUIRED: а. Journalize the unrecorded transactions. b. Journalize these adjusting entries for the period с. Explain to the office assistance the reasons for adjusting entries and the major types of adjusting entries.
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.
![1. The equipment depreciates $320 per month.
2. One-third of the $9,900 Unearned Service Revenue received in May, was earned
during the period.
3. Interest totaling $1,500 is accrued for the period.
4. Of the Supplies purchased on May 5, $840 remain on hand at the end of July.
5. Insurance expires at the rate of $400 per month.
6. Salaries of $3,600 were unpaid.
For the month of July, the cash records reflect a balance of $14,930 while its bank
statement balance was $14,150. A more detailed review reveals several reconciling items:
i. Deposits in transit amounted to $9,190.
ii. Included in the bank statement as at July 31, 2021 were the following memoranda:
• Credit Memorandum: a note for $1,690 and interest of $110 had been collected
by the bank and the bank charged a collection fee of $40.
• Debit Memorandum: $90 for service charges for thë month of July 2021.
iii. Outstanding cheques:
• Cheque #224 for $4,340
• Cheque #232 for $1,254
• Cheque #237 for $2,453
iv. Check no. 242 was issued to pay for purchases (Accounts Payables) in the amount
of $791 but had been entered in the cash journal as $719 in error.
v. Included in the company deposits for July 2021 was a cheque for $1,235, but the
bank has returned this cheque as NSF.
REQUIRED:
a.
Journalize the unrecorded transactions.
b.
Journalize these adjusting entries for the period
с.
Explain to the office assistance the reasons for adjusting entries and the major types
of adjusting entries.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8f34c27-d547-42cf-8513-49967d562251%2Fbce61bde-a215-4bf0-b679-9d0f0569d093%2Fr99ln9_processed.png&w=3840&q=75)
![Having completed your Introduction to Financial Accounting module with high marks, your
lecturer referred you to an Accounting firm who needed assistance with several accounting
tasks for some clients:
Problem 1
Journals, Bank Reconciliation & Adjusting Entries
Wellfield Corporation's Accountant is on maternity leave for the period of 3-months (May-
July). The office clerk was performing her duties however given his lack of Accounting
knowledge the Director contacted you to bring their accounting records up to par.
You discovered the following:
The following transactions were not recorded:
May 2
May 5
Took out $35,000 notes payable from the bank.
Purchased $2,800 worth of supplies on credit. This will last for several
months.
May 7
May 8
Collected $ 9,900 from clients for services to be performed.
Purchased equipment for $21,000, paying $11,000 cash and the balance
on account.
May 15
May 17
June 2
Billed clients for services provided, $14,000.
Paid $700 in cash for the current month's rent.
Paid $1,200 for supplies purchased on May. 5.
Paid $4,800 cash on balance owed for equipment.
Paid $2,200 cash for utilities.
Declared and paid a €1,000 cash dividend.
June 15
July 25
Jul 31
An analysis of the accounts shows that no adjusting entries were prepared for the maternity
leave period:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8f34c27-d547-42cf-8513-49967d562251%2Fbce61bde-a215-4bf0-b679-9d0f0569d093%2Fxunaitg_processed.png&w=3840&q=75)
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