Mr. Bab Agsakin opened a call center business called "Babagsakin Call Center" on October 1, 2021. The following were the transactions during the three months ended December 31, 2021: 1. On October 1, 2021, Mr. Agsakin provided an initial capital of ₱1,000,000 to the business. 2. The business acquired computer equipment for ₱700,000 cash on October 3, 2021. The equipment has useful life of 6 years and scrap value of ₱70,000. 3. Total payments for business permit and other licenses amounted to ₱200,000 (this will be under taxes and licenses expense account). 4. The business availed a one year Health insurance and paid the whole amount ₱24,000, covering October 1, 2021 to September 30, 2022. 5. Obtained a 12%, one year, bank loan for ₱100,000 on November 1, 2021. Principal and interest are due at maturity date October 31, 2022. 6. Total service fees billed to clients amounted to ₱3,200,000 on account as of December 31, 2021. 7. Total payments for repairs and maintenance amounted to ₱52,000 as of December 31, 2021. 8. Total payment for call center personnel amounted to ₱200,000 as their salaries as of December 31, 2021. 9. On December 31, 2021, Mr. Agsakin paid the total amount, ₱950,000 for PLDT bill just received. He also received the bill for Meralco amounting ₱355,000, which was still unpaid as of year-end 10. Total collections on accounts receivable amounted to ₱2,900,000. Additional Information: Unpaid Rent amounted to ₱30,000. Requirements: a. Provide journal entries b. Post the entries to the ledger. c. Prepare the unadjusted trial balance. d. Provide the adjusting entries. e. Provide the adjusted trial balance. f. Complete the worksheet up to post-closing trial balance. g. Prepare the closing entries h. Prepare the Statement of Financial Position and Statement of Income (Financial Statements)
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.
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