Mabel Wong began a professional practice as system analyst on July 1. She plans to prepare monthly financial statements. During July the owner completed these transactions: July 1. Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years ago but now worth P10,000 only July 2. Paid P25,000 cash for July rent (including P500 water bill of a fully furnished office space at the Madrigal Building July 4. Purchased P120,000 worth of state of the art equipment on credit for thirty monthly installment payments 6 Purchased office supplies for cash, P2,500 8 Completed work for a client and immediately collected the P32,000 cash earned 10 Completed work for a client and sent a bill for P27,000 to be paid within thirty days 15 Paid an assistant P6,200 cash as wages for 15 days 18 Collected P15,000 cash on the amount owed by the client 25 Completed work for another client who paid only P40,000 or 40% of the total computerized system. The client promised to pay the balance in thirty days. 28 Owner withdrew P5,000 cash for personal use 28 Paid the first instalment to settle the liability on the equipment purchased 30 Paid salary of assistant 31 Received PLDT bill, P1,800 and Meralco bill, P3,800 31 Used up to P2,000 worth of supplies Use the following: Cash, Accounts Receivable, Office Supplies, Equipment, Furnitures, Accounts Payable, Wong Capital
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.
Mabel Wong began a professional practice as system analyst on July 1. She plans to prepare monthly
financial statements. During July the owner completed these transactions:
| July 1. Owner invested P50,000 cash along with furniture and fixtures that had a P20,000 market value two years ago but now worth P10,000 only |
| July 2. Paid P25,000 cash for July rent (including P500 water bill of a fully furnished office space at the Madrigal Building |
| July 4. Purchased P120,000 worth of state of the art equipment on credit for thirty monthly installment payments |
| 6 Purchased office supplies for cash, P2,500 |
| 8 Completed work for a client and immediately collected the P32,000 cash earned |
| 10 Completed work for a client and sent a bill for P27,000 to be paid within thirty days |
| 15 Paid an assistant P6,200 cash as wages for 15 days |
| 18 Collected P15,000 cash on the amount owed by the client |
| 25 Completed work for another client who paid only P40,000 or 40% of the total computerized system. The client promised to pay the balance in thirty days. |
| 28 Owner withdrew P5,000 cash for personal use |
| 28 Paid the first instalment to settle the liability on the equipment purchased |
| 30 Paid salary of assistant |
| 31 Received PLDT bill, P1,800 and Meralco bill, P3,800 |
| 31 Used up to P2,000 worth of supplies |
Use the following: Cash, Accounts Receivable, Office Supplies, Equipment, Furnitures, Accounts Payable, Wong Capital
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