Journalize the following selected transactions for January in good form. Jan. 1 Received cash from the sale of common stock, $14,000. 2 Received cash for providing accounting services, $9,500. 3 Billed customers on account for providing services, $4,200. 4 Paid advertising expense, $700. 5 Received cash from customers on account, $2,500. 6 Paid dividends, $1,010. 7 Received telephone bill, $900. 8 Paid telephone bill, $900. Date Description Post. Ref. Debit Credit Prepare adjusting entries for the following transactions: (a) The beginning balance of the supplies account was $245. During the month the company bought additional supplies in the amount of $735. At the end of the month a physical inventory showed $343 of unused supplies. (b) The company has a 12% note payable in the amount of $17,000 due in 6 months. The interest expense for the month has not been recorded. (c) The company has two employees. The manager is paid on the 15th of every month for work performed during the first half of the month and on the 1st of the following month for the work performed during the second half of the month. His monthly salary is $5,500. The other employee is paid $650 for each 5-day work week (Monday - Friday). The last day of the month is on Thursday. (d) The unearned revenue account shows a balance of $46,000. According to the manager 60% of that amount has been earned. (e) At the end of the month $5,700 of services had been performed but not yet billed. Jordon James started JJJ Consulting on January 1. The following are the account balances at the end of the first month of business, before adjusting entries were recorded: Accounts Payable $ 300 Accounts Receivable 750 Cash 6,300 Consulting Revenue 4,925 Equipment 7,000 Common Stock 15,000 Dividends 1,375 Prepaid Rent 4,000 Supplies 800 Adjustment data: Supplies on hand at the end of the month, $200 Unbilled consulting revenue, $700 Rent expense for the month, $1,000 Depreciation on equipment, $90 (a) Prepare the required adjusting entries, adding accounts as needed. The following is the adjusted trial balance for Miller Company. Miller Company Adjusted Trial Balance December 31 Cash 8,130 Accounts Receivable 3,300 Prepaid Expenses 2,750 Equipment 10,400 Accumulated Depreciation 2,200 Accounts Payable 2,700 Notes Payable 1,000 Common Stock 9,200 Retained Earnings 2,000 Dividends 4,870 Fees Earned 36,600 Wages Expense 12,450 Rent Expense 4,900 Utilities Expense 3,475 Depreciation Expense 2,150 Miscellaneous Expense 1,275 Totals 53,700 53,700 Prepare closing entries. What is the post-closing balance in Retained Earnings? Prepare the Income Statement, Statement of Stockholder's Equity and Balance Sheet ( Extra Credit) (15 points)
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.
Journalize the following selected transactions for January in good form.
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Jan. |
1 |
Received cash from the sale of common stock, $14,000. |
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2 |
Received cash for providing accounting services, $9,500. |
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3 |
Billed customers on account for providing services, $4,200. |
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4 |
Paid advertising expense, $700. |
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5 |
Received cash from customers on account, $2,500. |
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6 |
Paid dividends, $1,010. |
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7 |
Received telephone bill, $900. |
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8 |
Paid telephone bill, $900. |
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Description |
Post. Ref. |
Debit |
Credit |
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Prepare
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(a) |
The beginning balance of the supplies account was $245. During the month the company bought additional supplies in the amount of $735. At the end of the month a physical inventory showed $343 of unused supplies. |
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(b) |
The company has a 12% note payable in the amount of $17,000 due in 6 months. The interest expense for the month has not been recorded. |
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(c) |
The company has two employees. The manager is paid on the 15th of every month for work performed during the first half of the month and on the 1st of the following month for the work performed during the second half of the month. His monthly salary is $5,500. The other employee is paid $650 for each 5-day work week (Monday - Friday). The last day of the month is on Thursday. |
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(d) |
The unearned revenue account shows a balance of $46,000. According to the manager 60% of that amount has been earned. |
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(e) |
At the end of the month $5,700 of services had been performed but not yet billed. |
Jordon James started JJJ Consulting on January 1. The following are the account balances at the end of the first month of business, before adjusting entries were recorded:
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Accounts Payable |
$ 300 |
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750 |
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Cash |
6,300 |
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Consulting Revenue |
4,925 |
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Equipment |
7,000 |
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Common Stock |
15,000 |
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Dividends |
1,375 |
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Prepaid Rent |
4,000 |
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Supplies |
800 |
Adjustment data:
Supplies on hand at the end of the month, $200
Unbilled consulting revenue, $700
Rent expense for the month, $1,000
(a) Prepare the required adjusting entries, adding accounts as needed.
The following is the adjusted
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Miller Company |
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Adjusted Trial Balance |
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December 31 |
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Cash |
8,130 |
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Accounts Receivable |
3,300 |
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Prepaid Expenses |
2,750 |
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Equipment |
10,400 |
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2,200 |
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Accounts Payable |
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2,700 |
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Notes Payable |
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1,000 |
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Common Stock |
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9,200 |
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2,000 |
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Dividends |
4,870 |
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Fees Earned |
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36,600 |
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Wages Expense |
12,450 |
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Rent Expense |
4,900 |
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Utilities Expense |
3,475 |
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Depreciation Expense |
2,150 |
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Miscellaneous Expense |
1,275 |
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Totals |
53,700 |
53,700 |
- Prepare closing entries.
- What is the post-closing balance in Retained Earnings?
- Prepare the Income Statement, Statement of
Stockholder's Equity and Balance Sheet ( Extra Credit) (15 points)
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