Q 1: NC operates a business closes its accounts and prepares financial statements at the end of each month. During the month of June entered into the following transactions: June 1 Owner deposited $ 150000 cash in a bank account . June 2 Purchased $ 240000 equipment, paid $ 100000 cash and issued a 9 percent note for the balance. June 3 Paid $ 10,000 four months advance rent. June 4 Received $12000 cash as advance payment on equipment from xyz company. June 5 Purchased office supplies on account from ABC $ 1850 payment due in 30 days. June 9 Purchased on account from F.P. distributor $ 290 parts needed to repair a rental tractor. Payment is due in ten days.( HINT: USE MAINTENANCE EXPENSE) June 10 Paid salaries for $ 3200. June 15 Equipment rental fees earned amount $ 8900 ,of which $ 7200 was received in cash. June 18 Paid the accounts payable to F.P. distributor. June 19 Collected $ 800 of the accounts receivable. June 23 Rented an equipment to M.L. company at a price $ 110 per day to be paid when returned back. This equipment is expected to remain with M.L company two to three weeks. June 25 Paid salaries $ 3200. June 28 Owner withdrew $ 3000 cash from the business for personal use. June 30 Equipment rent fees earned and received in cash amounted $ 7850. June 30 Received a bill from WAPDA for the month of June $ 340. Payment is due in 15 days. Other data: a. During June, the company earned $ 3210 of rental fees paid in advance on June 3. b. Office supplies on hand at June 30, are estimated at $ 1160. c. The rental equipment is being is being deprecated over a period of 10 years. d. The advance payment of rent on June 3 covered a period of four months. e. As of June 30 seven days rent on equipment rented to M.L .COMPANY has earned. f. As of June 30, interest accrued on note payable amounted to $ 1050. g. Salaries earned by employees amounted to $ 960. Required: A. Prepare income statement ? B. Statement of equity ? C. 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.
Subject : Principle Of Accounting
Q 1: NC operates a business closes its accounts and prepares financial statements at the end of each
month. During the month of June entered into the following transactions:
June 1 Owner deposited $ 150000 cash in a bank account .
June 2 Purchased $ 240000 equipment, paid $ 100000 cash and issued a 9 percent note for the
balance.
June 3 Paid $ 10,000 four months advance rent.
June 4 Received $12000 cash as advance payment on equipment from xyz company.
June 5 Purchased office supplies on account from ABC $ 1850 payment due in 30 days.
June 9 Purchased on account from F.P. distributor $ 290 parts needed to repair a rental tractor.
Payment is due in ten days.( HINT: USE MAINTENANCE EXPENSE)
June 10 Paid salaries for $ 3200.
June 15 Equipment rental fees earned amount $ 8900 ,of which $ 7200 was received in cash.
June 18 Paid the accounts payable to F.P. distributor.
June 19 Collected $ 800 of the
June 23 Rented an equipment to M.L. company at a price $ 110 per day to be paid when returned
back. This equipment is expected to remain with M.L company two to three weeks.
June 25 Paid salaries $ 3200.
June 28 Owner withdrew $ 3000 cash from the business for personal use.
June 30 Equipment rent fees earned and received in cash amounted $ 7850.
June 30 Received a bill from WAPDA for the month of June $ 340. Payment is due in 15 days.
Other data:
a. During June, the company earned $ 3210 of rental fees paid in advance on June 3.
b. Office supplies on hand at June 30, are estimated at $ 1160.
c. The rental equipment is being is being deprecated over a period of 10 years.
d. The advance payment of rent on June 3 covered a period of four months.
e. As of June 30 seven days rent on equipment rented to M.L .COMPANY has earned.
f. As of June 30, interest accrued on note payable amounted to $ 1050.
g. Salaries earned by employees amounted to $ 960.
Required:
A. Prepare income statement ?
B. Statement of equity ?
C.
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