Bill Evans began Evans Distributors, a sporting goods distribution company, in January 20X1 and engaged in the transactions below. Assume Evans Distributors and its customers take advantage of all cash discounts. DATE TRANSACTIONS 20x1 Bill Evans started Evans Distributors with an investment of $55,000. He also invested personal business equipment worth $7, 500. Purchased merchandise for cash, $11,500, Check 100. Sold merchandise on account to Rivera Corporation, $850, terms 2/10, n/30, Invoice 1001. Purchased merchandise on account from Tsang Company, $2,000, terms 1/10, n/3o, Invoice 1125. Received and paid freight charges related to January 4 purchase of merchandise from Tsang Company, $150, Check 101. 10 Rivera Corporation returned merchandise purchased on January 3; issued credit memo #101 for $150. Received payment in full from Rivera Corporation, after the return of January 10 and after the discount. Paid amount due to Tsang Company for purchase of January 4, Check 102. 15 Recorded cash sales for the two-week period ended January 15 of $7,250. Recorded sales on credit cards for the two-week period ended January 15, $1, 200; the bank charges a 3 percent fee on all Jan. 1 2 3 4 5 11 13 15 credit card sales. 15 Paid wages, $1,875, Check 103. 16 Purchased equipment (not for resale), $1,950, Check 104. 17 Paid freight for delivery of equipment purchased on January 16, $150, Check 105. Purchased merchandise on account from Terri Manufacturing with a list price of $5,500, subject to a trade discount of 40 percent, terms 1/10, n/30, Invoice 2078. Sold merchandise on account to Moloney Corp., $2,900, terms 1/10, n/30, Invoice 1002. Purchased merchandise on account from Johnson Company, $2,000, terms 1/10, n/30, Invoice 3204; freight prepaid by Johnson Company and added to invoice, $70. (Total invoice amount, $2,070.) Paid amount owed to Terri Manufacturing for purchase of January 18, Check 106. Purchased merchandise from Fronke Sports Fabricators with a list price of $2,800, subject to trade discounts of 25 percent and 10 percent, terms n/30, Invoice 1888. Received amount due from Moloney Corp. for the sale of January 20. Paid amount due to Johnson Company for purchase of January 21, Check 107. 31 Recorded cash sales for the period from January 16-31, $7,825. 31 Recorded sales credit card sales. 18 20 21 27 28 29 on the credit cards for the period from January 16-31, $2, 200; the bank charges a 3 percent fee on all
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.
Post to the general ledger
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