Transaction Entries, Posting, Trial Balance, and Adjusting Entries Mark Gold opened Gold Roofing Service on April 1. Transactions for April are as follows: 1 Gold contributed his personal funds in exchange for common stock to begin the business. $15,000 2 Purchased a used truck for cash. 6, 100 3 Purchased ladders and other equipment for a total of 3, 100 Paid cash of $1,000, with the balance due in 30 days. 4 Paid two-year premium on liability insurance. 6,000 5 Purchased supplies on account 1,200 6 Received an advance payment from a customer for roof repair work to be done in April and May. 1,800 7 Billed customers for roofing services. 9,000 8 Collected on account from customers. 6, 500 9 Paid bill for truck fuel used in April. 75 10 Paid April newspaper advertising. 100 11 Paid assistants' wages. 4,500 12 Billed customers for roofing services. 5,000 Required a. Set up a general ledger with the following accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Trucks; Accumulated Depreciation - Trucks; Equipment; Accumulated Depreciation - Equipment; Accounts Payable; Unearned Roofing Fees; Common Stock; Roofing Fees Earned; Fuel Expense; Advertising Expense; Wages Expense; Insurance Expense; Supplies Expense; Depreciation Expense - Trucks; and Depreciation Expense - Equipment. b. Record these transactions in the general journal and post to the ledger accounts. c. Prepare an unadjusted trial balance as of April 30. d. Prepare the journal entries to adjust the books for insurance expense, supplies expense, depreciation expense on the truck, depreciation expense on the equipment, and roofing fees earned. Supplies on hand on April 30 amounted to $950. Depreciation for April was $155 on the truck and $35 on the equipment. One-fourth of the roofing fee received in advance was earned by April 30. Post the adjusting entries. Journal Entries T-Accounts Unadjusted Trial Balance Adjusted Journal Entries
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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