Problem #9 Journalizing, Posting and Preparing a Trial Balance Maurice Sabio is a financial planning consultant. She completed transactions during the month of December of the current year: Dec. 1 Sabio invested cash in the business, P200,000. 3 Paid December office rent, P10,000. 4 Received P25,000 from a client, Rowena Carpio, for services rendered. 7 Received P20,000 from Olive Oabel, a client, for services rendered. 12 Paid cash to Shell Super Service for gasoline purchases, P600. 14 Paid cash to Tulungan Manpower Services in payment for contractual secretarial services during the past two weeks, P6,000. 17 Bought office supplies on account, P2,800. 20 Paid telephone bills, P1,000. 21 Sabio withdrew cash for personal use, P11,000. 24 Donated cash to the Phil. National Red Cross, P1,000. 27 Received P20,000 from Vivian De Guzman, a client, for services rendered. 28 Paid cash to Tulungan Manpower Services in payment for contractual secretarial services during the past two weeks, P6,000. 28 Paid electric bill, P750. 29 Made partial payment on supplies purchased on account, P1,000. Required: 1. Prepare the journal entries for the December transactions. 2. Set up the following ledger accounts and post all the journal entries: Cash; Accounts Receivable; Office Supplies; Accounts Payable; Sabio, Capital; Sabio, Withdrawals; Consulting Revenues; Rent Expense; Salaries Expense; Utilities Expense; Gasoline Expense and Charitable Contributions Expense. 3. Prepare a trial balance.
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.
Problem #9
Journalizing, Posting and Preparing a
Maurice Sabio is a financial planning consultant. She completed transactions during the
month of December of the current year:
Dec.
1 Sabio invested cash in the business, P200,000.
3 Paid December office rent, P10,000.
4 Received P25,000 from a client, Rowena Carpio, for services rendered.
7 Received P20,000 from Olive Oabel, a client, for services rendered.
12 Paid cash to Shell Super Service for gasoline purchases, P600.
14 Paid cash to Tulungan Manpower Services in payment for contractual
secretarial services during the past two weeks, P6,000.
17 Bought office supplies on account, P2,800.
20 Paid telephone bills, P1,000.
21 Sabio withdrew cash for personal use, P11,000.
24 Donated cash to the Phil. National Red Cross, P1,000.
27 Received P20,000 from Vivian De Guzman, a client, for services
rendered.
28 Paid cash to Tulungan Manpower Services in payment for contractual
secretarial services during the past two weeks, P6,000.
28 Paid electric bill, P750.
29 Made partial payment on supplies purchased on account, P1,000.
Required:
1. Prepare the
2. Set up the following ledger accounts and post all the journal entries: Cash;
Withdrawals; Consulting Revenues; Rent Expense; Salaries Expense; Utilities
Expense; Gasoline Expense and Charitable Contributions Expense.
3. Prepare a trial balance.
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