For the past several years, John Upton has operated a part-time consulting business from her home. As of July 1, 2019, John decided to move to rented quarters and to operate the business, which was to be known as Gourmet Consulting, on a full-time basis. Gourmet Consulting entered into the following transactions during July: July 1. The following assets were received from Jolene Upton: Cash, $19,000; Accounts Receivable, $22,300; supplies, $3,800; and office equipment, $8,900. There were no liabilities received. 1. Paid three months rent on a lease rental contract, $6,000 2. Paid the premiums on property and casualty insurance policies, $4,500 4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $8,000. 5. Purchased additional office equipment on account from Office Necessities Co., $5,100. 6. Received cash from clients on account, $12,750. 10. Paid cash for a newspaper advertisement, $500. 12. Paid office Necessities Co. for part of the debt incurred on July 5, $3,000 12. Provided services on account for the period July 1-12, $14,200 14. Paid receptionist for two weeks salary, $1,500. 17. Received cash from cash clients for fees earned during the period July 1-17, $10,400. 18. Paid cash for supplies, $1,000. 20. Provided services on account or the period July 12-20, $9,000. 24. Received cash from clients for fees earned for the period July 17-24, $8,500 26. Received cash from clients on account, $12,000. 27. Paid receptionist for two weeks salary, $1,500. 29. Paid telephone bill for July, $325. 31. Paid electricity bill for July, $675. 31. Received cash from cash clients for fees earned for the period July 25-31, $7,100. 31. Provided services on account for the remainder of July, $5,500. 31. Jolene withdrew $20,000 for personal use. INSTRUCTIONS; Journalize each transaction in a two column journal utilizing the following chart of accounts. 11 – Cash 31 – John Upton, Capital 12 – Accounts Receivable 32 – John Upton, Drawing 14 – Supplies 41 – Fees Earned 15 – Prepaid Rent 51 – Salary Expense 16 – Prepaid Insurance 52 – Rent Expense 18 – Office Equipment 53 – Supplies Expense 19 – Accumulated Depreciation – Office Equipment 54 – Depreciation Expense 21 – Accounts Payable 55 – Insurance Expense 22 – Salaries Payable 59 – Miscellaneous Expense 23 – Unearned Fees Post the transactions to “T” accounts
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.
For the past several years, John Upton has operated a part-time consulting business from her home. As of July 1, 2019, John decided to move to rented quarters and to operate the business, which was to be known as Gourmet Consulting, on a full-time basis. Gourmet Consulting entered into the following transactions during July:
July 1. The following assets were received from Jolene Upton: Cash, $19,000; Accounts Receivable,
$22,300; supplies, $3,800; and office equipment, $8,900. There were no liabilities received.
1. Paid three months rent on a lease rental contract, $6,000
2. Paid the premiums on property and casualty insurance policies, $4,500
4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $8,000.
5. Purchased additional office equipment on account from Office Necessities Co., $5,100.
6. Received cash from clients on account, $12,750.
10. Paid cash for a newspaper advertisement, $500.
12. Paid office Necessities Co. for part of the debt incurred on July 5, $3,000
12. Provided services on account for the period July 1-12, $14,200
14. Paid receptionist for two weeks salary, $1,500.
17. Received cash from cash clients for fees earned during the period July 1-17, $10,400.
18. Paid cash for supplies, $1,000.
20. Provided services on account or the period July 12-20, $9,000.
24. Received cash from clients for fees earned for the period July 17-24, $8,500
26. Received cash from clients on account, $12,000.
27. Paid receptionist for two weeks salary, $1,500.
29. Paid telephone bill for July, $325.
31. Paid electricity bill for July, $675.
31. Received cash from cash clients for fees earned for the period July 25-31, $7,100.
31. Provided services on account for the remainder of July, $5,500.
31. Jolene withdrew $20,000 for personal use.
INSTRUCTIONS;
- Journalize each transaction in a two column journal utilizing the following chart of accounts.
11 – Cash 31 – John Upton, Capital
12 – Accounts Receivable 32 – John Upton, Drawing
14 – Supplies 41 – Fees Earned
15 – Prepaid Rent 51 – Salary Expense
16 – Prepaid Insurance 52 – Rent Expense
18 – Office Equipment 53 – Supplies Expense
19 –
21 – Accounts Payable 55 – Insurance Expense
22 – Salaries Payable 59 – Miscellaneous Expense
23 – Unearned Fees
Post the transactions to “T” accounts
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
