The post-closing trial balance of Peter’s Lawn Services as at 30 June 2021 is as follows: The following transactions occurred during the month of July 2021. July 1 Purchased a used motor vehicle for cash, $12,000, for use in business. 7 Completed landscaping job for a client and received cash, $15,000. 10 Performed lawn services for a client on credit, $1,800 12 Purchased fertiliser supplies on credit, $2,000 14 Paid $3,500 of the accounts payable. 15 Received $900 on account from 10 July transaction. 25 Peter withdrew capital of $3,500. 31 Paid $5,160 for a one-year insurance policy. Required a) Journalise the transactions for the month of July 2021. Narrations are required. b) Prepare the cash at bank ledger account as at 31 July 2021.
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.
The post-closing
The following transactions occurred during the month of July 2021.
|
July 1 |
Purchased a used motor vehicle for cash, $12,000, for use in business. |
|
7 |
Completed landscaping job for a client and received cash, $15,000. |
|
10 |
Performed lawn services for a client on credit, $1,800 |
|
12 |
Purchased fertiliser supplies on credit, $2,000 |
|
14 |
Paid $3,500 of the accounts payable. |
|
15 |
Received $900 on account from 10 July transaction. |
|
25 |
Peter withdrew capital of $3,500. |
|
31 |
Paid $5,160 for a one-year insurance policy. |
Required
a) Journalise the transactions for the month of July 2021. Narrations are required.
b) Prepare the cash at bank ledger account as at 31 July 2021.
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