Required information [The following information applies to the questions displayed below.) The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Account Titles Cash Inventory Common Stock Retained Earnings Beginning Balances $6,040 3,020 7,490 1,570 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,19O. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $265 cash. 3. Returned $490 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $200 allowance. 5. Sold merchandise that cost $2,630 for $4,910 cash. 5. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $160 cash. 7. Paid $2,970 on the merchandise purchased in Event 1.
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.
![Required
a. Organize appropriate ledger accounts under an accounting equation. Record the beginning balances and the transaction
data in the accounts. In the last column of the table, provide appropriate account titles for the Retained Earnings
amounts. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for
Retained Earnings, leave the cell blank. Not every cell will require entry.)
TERRY'S AUTO SHOP
Effect of Events on the Financial Statements
Assets
= Liabilities+
Stockholders' Equity
Accounts Titles for Retained
Earnings
Accounts
Common
Retained
Events
Cash
Inventory
Payable
Stock
Earnings
+]
Beg. Bal.
1.
2.
3.
4.
5a.
5b.
6.
7.
End Bal.
Next](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff7854056-beba-4b74-acb0-7e46a61e320c%2Fdb3134f4-8f52-4e99-a035-86391fe0ae1e%2Ff8xojkb_processed.jpeg&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
