The following information is provided for the first month of operations for Legal Services Inc.:A. The business was started by selling $100,000 worth of common stock.B. Six months’ rent was paid in advance, $4,500.C. Provided services in the amount of $1,000. The customer will pay at a later date.D. An office worker was hired. The worker will be paid $275 per week.E. Received $500 in payment from the customer in “C”.F. Purchased $250 worth of supplies on credit.G. Received the electricity bill. We will pay the $110 in thirty days.H. Paid the worker hired in “D” for one week’s work.I. Received $100 from a customer for services we will provide next week.J. Dividends in the amount of $1,500 were distributed.Prepare the necessary journal entries to record these transactions. If an entry is not required for any of thesetransactions, state this and explain why
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.
The following information is provided for the first month of operations for Legal Services Inc.:
A. The business was started by selling $100,000 worth of common stock.
B. Six months’ rent was paid in advance, $4,500.
C. Provided services in the amount of $1,000. The customer will pay at a later date.
D. An office worker was hired. The worker will be paid $275 per week.
E. Received $500 in payment from the customer in “C”.
F. Purchased $250 worth of supplies on credit.
G. Received the electricity bill. We will pay the $110 in thirty days.
H. Paid the worker hired in “D” for one week’s work.
I. Received $100 from a customer for services we will provide next week.
J. Dividends in the amount of $1,500 were distributed.
Prepare the necessary
transactions, state this and explain why
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images