Required Informatlon [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. Beginning Balances $16, 000 Account Tibles Canh Inventory 8,000 Common 3tock Retained Earnings 20, 000 4, 000 The following events affected the company during the Year 2 accounting perod: 1. Purchased merchandise on account that cost $15,00. 2 The goods in Event 1 were purchased FOB shipping point with freight cost of $800 cash. 3. Returned $2.600 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company recelved a $1.100 allowance. 5. Sold merchandise that cost $15,000 for $31,000 cash. 6. Delivered merchandise to customers In Event 5 under terms FOB destination with freight costs amounting to $500 cash. 7. Paid $8,000 on the merchandise purchased in Event 1. 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 mlnus sign. If there Is no effect on the Accounts Titles for Retalned Eernings, leeve the cell blank. Not every cell will requlre entry.) TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets Liabilities+ Stockholders' Equity Retained Accounts Titles for Retained Inventory Accounts Payable Common Stock Events Cash Earnings Earnings Beg. Bal. 1. 2. 3. 4. 5a. 56
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 Information
he folowing iaformation applies to the questions displayed beow]
The beginning account balances for Tery's Auto Shop as of January 1, Year 2. follow
7ASINK
Tmmkng BaABOEN
$16.000
Inventony
Commn Steck
Bebained Eaxnings
8,000
20,000
4,000
The followtng events affected the company durtng the Year 2 accounting pertod
1 Purchased merchandise on account that cost $15,00.
2. The goods in Event 1 were purchased FOB shipping polnt with fretght cost of $800 cash.
3. Returned $2,600 of damaged merchandise for credit on account
4. Agreed to keep other damaged merchandise for which the company recetved a $1,100 allowance.
5. Sold merchandise that cost $15,000 for $31,000 cash.
6. Delivered merchandise to customers In Event 5 under terms FOB destination with freight costs amounting to $500
cash
7. Pald $8,000 on the merchandise purchased in Event 1.
Required
a. Organtze 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 approprlate account titles for the Retalned Earnings amounts. (Enter any
decreases to account balances with a minus sign. If there Is no effect on the Accounts Titles for Retalned Earnings, leave the
cell blank. Not every cell wll requlre entry.)
TERRY'S AUTO SHOP
Effect of Events on the Financial Statements
Stockholders' Equity
- Liabilities +
Accounts Titles for Retained
Earnings
Assets
Accounts Common
Payable
Retained
Earnings
Cash
Inventory
Stock
+]
Events
Beg Bal
2.
3.
4.
5b
6.
7.
Next >
80
End Bal
567 of 8
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![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.
Beginning BalanceS
$16, 000
8,000
20, 000
4, 000
Account Titles
Cash
Inventory
Common Stock
Retained Earnings
The following events affected the company during the Year 2 accounting perlod:
1. Purchased merchandise on account that cost $15,000,
2. The goods In Event 1 were purchased FOB shipping point with freight cost of $800 cash.
3. Returned $2,600 of damaged merchandise for credit on account.
4. Agreed to keep other damaged merchandise for which the company recelved a $1,100 allowance.
5. Sold merchandise that cost $15,000 for $31,000 cash.
6. Delivered merchandise to customers In Event 5 under terms FOB destination with frelght costs amounting to $500
cash.
7. Pald $8,000 on the merchandise purchased in Event 1.
Requlred
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 Retalned Earnings, leave the
cell blank. Not every cell will requlre entry.)
TERRY'S AUTO SHOP
Effect of Events on the Financial Statements
Assets
- Liabilities +
Stockholders' Equity
Accounts
Payable
Common Retained
Stock
Accounts Titles for Retained
Earnings
Events
Cash
Inventory
Earnings
Beg. Bal.
1.
+
2.
3.
4.
5a,
5b.
6.
7.
End Bal.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F80998f00-6fe5-4524-a68f-93f247b136b5%2F4d784269-3de3-47d6-99cb-a5c908f42d54%2Fvodmzkh_processed.jpeg&w=3840&q=75)
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