Prepare the Balance Sheet and Income Statement on the following hypothetical business Vios Services July 1 - Vios opened a repair shop business with trade name Vios Repair Service and invested cash P100,000, shop equipment for P65,000 and furniture and fixtures for P50,000 July 2 - Paid one year rental of the shop amounting to P60,000 July 2 - Rendered services for cash – P75,000 July 5 - Rendered services on account for P100,000 with 30% down payment and balance on the account July 10 - Purchased a computer on account for P45,000 and made a 10% down payment July 15 - Paid salaries of 2 employees for P20,000 each July 20 - Collected 50% of the balance on services rendered last July 5 July 25 - Paid the salary of employees for P20,000 each Include the following 1. Journal Entries 2. Trial Balance 3. Income Statement 4. Balance Sheet
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.
Prepare the
Vios Services
July 1 - Vios opened a repair shop business with trade name Vios Repair Service and invested cash P100,000, shop equipment for P65,000 and furniture and fixtures for P50,000
July 2 - Paid one year rental of the shop amounting to P60,000
July 2 - Rendered services for cash – P75,000
July 5 - Rendered services on account for P100,000 with 30% down payment and balance on the account
July 10 - Purchased a computer on account for P45,000 and made a 10% down payment
July 15 - Paid salaries of 2 employees for P20,000 each
July 20 - Collected 50% of the balance on services rendered last July 5
July 25 - Paid the salary of employees for P20,000 each
Include the following
1.
2.
3. Income Statement
4. Balance Sheet
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