Susie Smith opened Susie's Commerical Clearning on April 1, 2021. In Apr, the following transactions were completed. Apr-01 Invested $14,000 cash in the business 1 Purchased a used truck for $26,400, paying S6,400 cash and signing a note payable for the balance 1 Collected $3,000 from XYZ for their cleaning needs for Apr, May and June. 3 Purchased cleaning supplies on account for $850 5 Paid $1,800 on a one-year insurance policy, effective Apr 1 12 Billed customers $3,800 for cleaning services 18 Paid $400 of amount owed on cleaning supplies 20 Paid $1,600 for employee's salaries 21 Collected $1,400 from customers billed on Apr 12 25 Billed customers for $3,000 for cleaning services 30 Paid gas and oil for the month on the truck $350 30 Withdrew $1,600 to pay personal property taxes Additional Information: 1. Annual payments of $3,000 are required on the note. Required 1. Journalize and post the Apr transactions. Susie's Commerical Cleaning records all prepaid expenses and unearned revenues as assets and liabilities Prepare an unadjusted trial balance at April 30, 2021. Journalize and post the following adjustments a. Earned and unbilled fees at Apr 30, 2021 were $1,500. b. The truck has an estimated useful life of four years and no residual value. c. The insurance policy is effective Apr 1, 2021 and expires on March 31, 2022 d. An inventory count shows $375 of cleaning supplies on hand at Apr 30, 2021. e. At Apr 30. 2021, $1,000 of the fees collected in advance have been earned. f. Accrued but unpaid employee salaries were $400. g. The note payable has a 6% annual interest rate. 23.
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.
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