[The following information applies to the questions displayed below.] Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions during a recent year. January 2 Purchased a tour bus for $92,000 by paying $32,000 cash and signing a $60,000 note due in two years. In its accounting system, the company records the vehicle distinct from other types of equipment. January 8 After the bus was used for nearly one week, it was painted with the logos of the two bands at a cost of $950, on account. The logos did not increase the lifespan, operating capacity, or operating efficiency of the bus, but they were thought to be useful in promoting the bands. January 30 Wrote a check for the amount owed on account for the work completed on January 8. February 1 Purchased new speakers and amplifiers and wrote a check for the full $30,000 cost. February 8 Paid $850 cash for minor repairs to the tour bus. March 1 Paid $32,000 cash and signed a $250,000 five-year note to purchase a small office building and land. An appraisal indicated that the building and land contributed equally to the total price. March 31 Paid $91,000 cash to acquire the goodwill and certain tangible assets of Kris' Myth, Incorporated. The fair values of the tangible assets acquired were $21,000 for band equipment and $61,000 for recording equipment. Required: 1-a. Complete the following accounting equation table for the above transactions. TIP: Goodwill is recorded as the excess of the purchase price over the fair value of individual assets. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.)
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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[The following information applies to the questions displayed below.]
Palmer Cook Music Productions manages and operates two bands. The company entered into the following transactions
during a recent year.
January 2 Purchased a tour bus for $92,000 by paying $32,000 cash and signing a $60,000 note due in two
years. In its accounting system, the company records the vehicle distinct from other types of
equipment.
January 8 After the bus was used for nearly one week, it was painted with the logos of the two bands at a
cost of $950, on account. The logos did not increase the lifespan, operating capacity, or
operating efficiency of the bus, but they were thought to be useful in promoting the bands.
January 30 Wrote a check for the amount owed on account for the work completed on January 8.
February 1 Purchased new speakers and amplifiers and wrote a check for the full $30,000 cost.
February 8 Paid $850 cash for minor repairs to the tour bus.
March 1 Paid $32,000 cash and signed a $250,000 five-year note to purchase a small office building and
land. An appraisal indicated that the building and land contributed equally to the total price.
March 31 Paid $91,000 cash to acquire the goodwill and certain tangible assets of Kris' Myth,
Incorporated. The fair values of the tangible assets acquired were $21,000 for band equipment and
$61,000 for recording equipment.
Required:
1-a. Complete the following accounting equation table for the above transactions. TIP: Goodwill is recorded as the excess of the
purchase price over the fair value of individual assets. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a
minus sign.)
× Answer is not complete.
Date
January 02
January 02
Assets
Liabilities
January 08
Vehicles
Cash
Cash
92,000
=
Notes Payable (long-term)
32,000 =
(950) =
Accounts Payable
January 30
Accounts Payable
(950)
Cash
60,000
+
(950) +
950
Stockholders' Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7166f556-b438-4b40-b98f-4009ae0ebd1b%2F8ec2c61c-b139-4292-b763-3ce90c9961e8%2Fd3x6ee_processed.jpeg&w=3840&q=75)
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