Sunland Company decides to open a pizza parlor near the local college campus that will operate as a corporation. Analyze the following transactions for the month of June in terms of their effect on the basic accounting equation. (1) Sunland Company invests $20500 cash in exchange for common stock to start the pizza parlor on June 1. (2) Purchased equipment for $4000 paying $1850 in cash and the remainder due in 30 days. (3) Purchased supplies for $1700 cash. (4) Received a bill from Campus News for $300 for advertising in the campus newspaper. (5) Cash receipts from customers for pizza sales amounted to $2000. (6) Paid salaries of $210 to student workers. (7) Billed the Tiger Football Team $250 for pizzas ordered. (8) Paid $300 to Campus News for advertising that was previously billed in Transaction 4. (9) Sunland Company was paid dividends of $1400. (10) Incurred utility expenses for month on account, $80. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in stockholders' equity. (If Balance is negative then enter either a - sign e.g. -15,000 or in parenthesis e.g. (15,000). Enter all transaction amounts as positive and select the appropriate sign from the drop down.) Transaction Cash + Accounts Receivable + Supplies + Equipment
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.
Sunland Company decides to open a pizza parlor near the local college campus that will operate as a corporation. Analyze the following transactions for the month of June in terms of their effect on the basic
| (1) | Sunland Company invests $20500 cash in exchange for common stock to start the pizza parlor on June 1. | |
| (2) | Purchased equipment for $4000 paying $1850 in cash and the remainder due in 30 days. | |
| (3) | Purchased supplies for $1700 cash. | |
| (4) | Received a bill from Campus News for $300 for advertising in the campus newspaper. | |
| (5) | Cash receipts from customers for pizza sales amounted to $2000. | |
| (6) | Paid salaries of $210 to student workers. | |
| (7) | Billed the Tiger Football Team $250 for pizzas ordered. | |
| (8) | Paid $300 to Campus News for advertising that was previously billed in Transaction 4. | |
| (9) | Sunland Company was paid dividends of $1400. | |
| (10) | Incurred utility expenses for month on account, $80. |
Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in
| Transaction | Cash | + | + | Supplies | + | Equipment |
|---|
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