Requirements Sheet in Workbook Requirement 1—Prepare the Journal Entries in the General Journal Journal Entries Requirement 2—Post Journal Entries to the General Ledger General Ledger Requirement 3—Prepare a Trial Balance Trial Balance Requirement 4—Prepare the Adjusting Entries Adjusting Entries Requirement 5—Post Adjusting Entries to the General Ledger General Ledger Requirement 6—Prepare an Adjusted Trial Balance Adjusted Trial Balance Requirement 7—Prepare the Financial Statements Financial Statements Requirement 8—Prepare the Closing Entries Closing Entries Requirement 9—Post Closing Entries to the General Ledger General Ledger Requirement 10—Prepare the Post Closing Trial Balance Post-Closing Trial Balance During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $60,000, in exchange for 6,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $3,500 July 5 Paid the premium on a 1-year insurance policy, $4,200 July 7 Purchased supplies on account from Little Company, $1,000. July 10 Paid employee salaries, $3,500 July 14 Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was placed on account. Payments will be $500.00 per month until the equipment is paid. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $8,000 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $9,000 July 31 Declared and paid cash dividends of $600.
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.
| Requirements | Sheet in Workbook |
| Requirement 1—Prepare the |
Journal Entries |
| Requirement 2—Post Journal Entries to the General Ledger | General Ledger |
| Requirement 3—Prepare a |
Trial Balance |
| Requirement 4—Prepare the |
Adjusting Entries |
| Requirement 5—Post Adjusting Entries to the General Ledger | General Ledger |
| Requirement 6—Prepare an Adjusted Trial Balance | Adjusted Trial Balance |
| Requirement 7—Prepare the Financial Statements | Financial Statements |
| Requirement 8—Prepare the Closing Entries | Closing Entries |
| Requirement 9—Post Closing Entries to the General Ledger | General Ledger |
| Requirement 10—Prepare the Post Closing Trial Balance | Post-Closing Trial Balance |
| During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, | ||||||||||||
| completed the following transactions. | ||||||||||||
| July 1 | Began business by making a deposit in a company bank account of $60,000, in exchange | |||||||||||
| for 6,000 shares of $10 par value common stock. | ||||||||||||
| July 3 | Paid the current month's rent, $3,500 | |||||||||||
| July 5 | Paid the premium on a 1-year insurance policy, $4,200 | |||||||||||
| July 7 | Purchased supplies on account from Little Company, $1,000. | |||||||||||
| July 10 | Paid employee salaries, $3,500 | |||||||||||
| July 14 | Purchased equipment from Lake Company, $10,000. Paid $2,500 down and the balance was | |||||||||||
| placed on account. Payments will be $500.00 per month until the equipment is paid. The first payment is due 8/1. | ||||||||||||
| Note: Use accounts payable for the balance due. | ||||||||||||
| July 15 | Received cash for preparing tax returns for the first half of July, $8,000 | |||||||||||
| July 19 | Made payment on account to Lake Company, $500. | |||||||||||
| July 31 | Received cash for preparing tax returns for the last half of July, $9,000 | |||||||||||
| July 31 | Declared and paid cash dividends of $600. |
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