Janet Enterprises incorporated on May 3, current year. The company engaged in the following transactions during its first month of operations. May 3: Issued capital stock in exchange for $950,000 cash. May 4: Paid May office rent expense of $1,800. May 5: Purchased office supplies for $600 cash. The supplies will last for several months. May 15: Purchased office equipment for $12,400 on account. The entire amount is due June 15. May 18: Purchased a company car for $45,000. Paid $15,000 cash and issued a note payable for the remaining amount owed. May 20: Billed clients $120,000 on account. May 26: Declared an $8,000 dividend. The entire amount will be distributed to shareholders on June 26. May 29: Paid May utilities of $500. May 30: Received $90,000 from clients billed on May 20. May 31: Recorded and paid salary expense of $32,000. A partial list of the account titles used by the company includes the following. Cash Dividends Payable Accounts Receivable Dividends Office Supplies Capital Stock Office Equipment Client Revenue Vehicles Office Rent Expense Notes Payable Salary Expense Accounts Payable Utilities Expense Instructions: Prepare journal entries, including explanations, for these transactions.
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.
Janet Enterprises incorporated on May 3, current year. The company engaged in the following transactions during its first month of operations.
May 3: Issued capital stock in exchange for $950,000 cash.
May 4: Paid May office rent expense of $1,800.
May 5: Purchased office supplies for $600 cash. The supplies will last for several months.
May 15: Purchased office equipment for $12,400 on account. The entire amount is due June 15.
May 18: Purchased a company car for $45,000. Paid $15,000 cash and issued a note payable for the remaining amount owed.
May 20: Billed clients $120,000 on account.
May 26: Declared an $8,000 dividend. The entire amount will be distributed to shareholders on June 26.
May 29: Paid May utilities of $500.
May 30: Received $90,000 from clients billed on May 20.
May 31: Recorded and paid salary expense of $32,000.
A partial list of the account titles used by the company includes the following.
Cash Dividends Payable
Accounts Receivable Dividends
Office Supplies Capital Stock
Office Equipment Client Revenue
Vehicles Office Rent Expense
Notes Payable Salary Expense
Accounts Payable Utilities Expense
Instructions:
- Prepare
journal entries , including explanations, for these transactions.
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