June Kris transferred cash from a personal bank account to an account to be used for the business, $35,000. 1. 1. Paid rent for period of June 1 to end of month, $4,750. 6. Purchased office equipment on account, $14,100. Purchased a van for $28,500 paying $4,500 cash and giving a note 8. payable for the remainder. 10. Purchased supplies for cash, $2,380. 12. Received cash for job completed, $12,200. Paid annual premiums on property and casualty insurance, 15. $3,600. Recorded jobs completed on account and sent invoices to 23. customers, $11,900. 24. Received an invoice for van expenses, to be paid in June, $1,500. June Paid utilities expense, $3,100. 29. 29. Paid miscellaneous expenses, $950. 30. Received cash from customers on account, $7,330. 30. Paid wages of employees, $5,070. Paid creditor a portion of the amount owed for equipment 30. purchased on June 6, $6,825. 30. Withdrew cash for personal use, $1,600.
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.
On June 1, 2019, Kris Storey established an interior decorating business,
Eco-Centric Designs. During the montll, Kris completed the following
transactions related to the business:
Instructions
1. Journalize each transaction in a two-column journal beginning on
Page 1, referring to the following chart of accounts in selecting the
accounts to be debited and credited. (Do not insert the account numbers
in the journal at this time.) Explanations may be omitted.
11 Cash
12 Accounts Receivable
15 Supplies
14 Prepaid Insurance
16 Equipment
18 Van
21 Notes Payable
22 Accounts Payable
$1 Kris Storey, Capital
$2 Kris Storey, Drawing
41 Fees Earned
51 Wages Expense
59 Rent Expense
54 Utilities Expense
55 Van Expense
59 Miscellaneous Expense
2. Post the journal to a ledger of four-column accounts, inserting
appropriate posting references as each item is posted. Extend the
balances to the appropriate balance columns after each transaction is
posted.
3. Prepare an unadjusted trial balance for Eco-Centric Designs as of
June 30, 2019.
4. Determine the excess of revenues over expenses for June.
5. Can you think of any reason why the amount determined in (4) might
not be the net income for June?
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