Winnie Villanueva is a painting contractor. During the month of April, she completed the following transactions: April 2 Invested in the business painting equipment valued at P12, 300 and placed P71,000 in a business checking account. 3 Acquired a service vehicle costing P80, 000. Paid P50, 000 cash and signed a note for the balance. 4 Purchase painting supplies on account for P3, 200. 5 Completed a painting job and billed the customer P4, 800. 7 Received P1, 500 cash for painting an apartment room. 10 Purchased painting supplies for P1, 600 CASH. 11 Received a P4, 800 check from customer billed on April 5. 12 Paid P4, 000 for an insurance policy for a one-year coverage. 13 Billed a customer P6, 200 for painting job. 14 Paid the assistant P1, 500 for twenty-five hours’ work. 15 Paid P400 for a tune-up of the service vehicle. 18 Paid for the painting supplies purchased on April 4. 20 Purchased a new ladder for P6, 000 and painting supplies for P2, 900. 22 Received a telephone bill for P600, due next month. 23 Received P3, 300 in cash form the customer billed on April 13. 24 Transferred P3, 000 to a personal checking account. 25 Received P3, 600 in cash for painting a two-room apartment. 27 Paid P2, 000 on the note signed for the service vehicle. 29 Paid the assistance P1, 800 for thirty hours’ work. Required: Prepare the journal entries to record the April transactions: Set-up the following T-accounts and post all the journal entries: Cash; Accounts Receivable; Painting Supplies; Prepaid Insurance; Painting Equipment; Service Vehicle; Notes Payable; Accounts Payable; Villanueva, Capital; Villanueva, Withdrawals; Painting Revenues; Wages Expense; Utilities Expense; and Maintenance Expense. Prepare a trial balance. Problem 2
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.
Winnie Villanueva is a painting contractor. During the month of April, she completed the following transactions:
April 2 Invested in the business painting equipment valued at P12, 300 and placed P71,000 in a business checking account.
3 Acquired a service vehicle costing P80, 000. Paid P50, 000 cash and signed a note for the balance.
4 Purchase painting supplies on account for P3, 200.
5 Completed a painting job and billed the customer P4, 800.
7 Received P1, 500 cash for painting an apartment room.
10 Purchased painting supplies for P1, 600 CASH.
11 Received a P4, 800 check from customer billed on April 5.
12 Paid P4, 000 for an insurance policy for a one-year coverage.
13 Billed a customer P6, 200 for painting job.
14 Paid the assistant P1, 500 for twenty-five hours’ work.
15 Paid P400 for a tune-up of the service vehicle.
18 Paid for the painting supplies purchased on April 4.
20 Purchased a new ladder for P6, 000 and painting supplies for P2, 900.
22 Received a telephone bill for P600, due next month.
23 Received P3, 300 in cash form the customer billed on April 13.
24 Transferred P3, 000 to a personal checking account.
25 Received P3, 600 in cash for painting a two-room apartment.
27 Paid P2, 000 on the note signed for the service vehicle.
29 Paid the assistance P1, 800 for thirty hours’ work.
Required:
- Prepare the
journal entries to record the April transactions:
- Set-up the following T-accounts and post all the journal entries: Cash;
Accounts Receivable ; Painting Supplies; Prepaid Insurance; Painting Equipment; Service Vehicle; Notes Payable; Accounts Payable; Villanueva, Capital; Villanueva, Withdrawals; Painting Revenues; Wages Expense; Utilities Expense; and Maintenance Expense.
- Prepare a
trial balance .
Problem 2
Paning Camot recently established a business that will operate as Maning Tiil Cleaning Service. The transactions for February 2018 are presented below:
|
Feb. |
1 |
Deposited P62, 000 cash in a bank account in the name of the new entity. |
|
3 |
Acquired cleaning supplies on account, P21, 400. |
|
|
5 |
Acquired cleaning equipment on account, P15, 600. |
|
|
6 |
Acquired an old service vehicle costing P47, 000 for the business, paying P10, 000 cash, and financing the remaining P37, 000 by issuing a note. |
|
|
7 |
Paid rent on office space for the month, P7, 300. |
|
|
9 |
Received P31, 800 cash for cleaning services rendered. |
|
|
10 |
Paid for a newspaper advertisement, P1, 700. |
|
|
12 |
Paid for insurance for the next six months by recording prepaid insurance, P4, 800. |
|
|
13 |
Paid P9, 000 on account. |
|
|
14 |
Paid miscellaneous expenses, P2, 200. |
|
|
15 |
Billed customers P18, 600 for cleaning services rendered. |
|
|
16 |
Paid salaries, P8, 400. |
|
|
20 |
Received P9, 800 from customers billed on Feb. 15. |
|
|
22 |
Paid amount due on the note payable, P2, 400. |
|
|
25 |
Paid telephone expense, P900. |
|
|
28 |
Paid salaries, P7, 900. |
|
|
28 |
Billed customers for cleanings services rendered, P22, 500. |
|
|
28 |
Withdrew P10, 000 from the business. |
Required:
- Prepare the journal entries for the February transactions. Use the following accounts: Cash; Accounts Receivable; Cleaning Supplies; Prepaid Insurance; Cleaning Equipment; Service Vehicle; Notes Payable; Accounts Payable; Camot, Capital. Camot, Withdrawals; Cleaning Revenues; Salaries Expense; Rent Expense; Advertising Expense; Telephone Expense and Miscellaneous Expense.
- Prepare a trial balance.
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