During May, Peyton entered into the following transactions: May 1. Peyton Sawyer made an additional investment in Tree Hill Music by depositing RM5,000 in Tree Hill Music's current account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for May, RM1,750. 1. Paid a premium of RM2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received RM1,000 cash from customers on account. 3. On behalf of Tree Hill Music, Peyton signed a contract with a local radio station, KXMD, for the next three months. The contract requires Tree Hill Music to provide a guest DJ for 80 hours per month for a monthly fee of RM3,600. Any additional hours beyond 80 will be billed to KXMD at RM40 per hour. In accordance with the contract, Peyton received RM7,200 from KXMD as an advance payment for the first two months. 3. Paid RM250 to creditors on account. 4. Paid an attorney RM900 for reviewing the May 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, RM7,500. 8. Paid for a newspaper advertisement, RM200. 11. Received RM1,000 for serving as a DJ for a party. 13. Paid RM700 to a local audio electronics store for the rental of digital recording equipment. 14. Paid wages of RM1,200 to the receptionist and part-time assistant. 16. Received RM2,000 for serving as a DJ for a wedding reception. 18. Purchased supplies on account, RM850. 21. Paid RM620 (music expense) to HM Music for the use of its current music demos in making various music sets. 22. Paid RM800 to a local radio station to advertise the services of Tree Hill Music twice daily for the remainder of May. 23. Served as DJ for a party for RM2,500. Received RM750, with the remainder due on 4 June 2022. 27. Paid electric bill, RM915. 28. Paid wages of RM1,200 to the receptionist and part-time assistant. 29. Paid miscellaneous expenses, RM540. 30. Served as a DJ for a charity ball for RM1,500. Received RM500, with the remainder due on 9 June 2022. 31. Received RM3,000 for serving as a DJ for a party. 31. Paid RM1,400 royalties (music expense) to National Music for use of various artists' music during May. 31. Withdrew RM1,250 cash from Tree Hill Music for personal use. Question: Journalize entries for transactions 1 through 31.
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.
During May, Peyton entered into the following transactions:
May 1. Peyton Sawyer made an additional investment in Tree Hill Music by depositing RM5,000 in Tree Hill Music's current account.
1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for May, RM1,750.
1. Paid a premium of RM2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
2. Received RM1,000 cash from customers on account.
3. On behalf of Tree Hill Music, Peyton signed a contract with a local radio station, KXMD, for the next three months. The contract requires Tree Hill Music to provide a guest DJ for 80 hours per month for a monthly fee of RM3,600. Any additional hours beyond 80 will be billed to KXMD at RM40 per hour. In accordance with the contract, Peyton received RM7,200 from KXMD as an advance payment for the first two months.
3. Paid RM250 to creditors on account.
4. Paid an attorney RM900 for reviewing the May 3 contract with KXMD. (Record as Miscellaneous Expense.)
5. Purchased office equipment on account from Office Mart, RM7,500.
8. Paid for a newspaper advertisement, RM200.
11. Received RM1,000 for serving as a DJ for a party.
13. Paid RM700 to a local audio electronics store for the rental of digital recording equipment.
14. Paid wages of RM1,200 to the receptionist and part-time assistant.
16. Received RM2,000 for serving as a DJ for a wedding reception.
18. Purchased supplies on account, RM850.
21. Paid RM620 (music expense) to HM Music for the use of its current music demos in making various music sets.
22. Paid RM800 to a local radio station to advertise the services of Tree Hill Music twice daily for the remainder of May.
23. Served as DJ for a party for RM2,500. Received RM750, with the remainder due on 4 June 2022.
27. Paid electric bill, RM915.
28. Paid wages of RM1,200 to the receptionist and part-time assistant.
29. Paid miscellaneous expenses, RM540.
30. Served as a DJ for a charity ball for RM1,500. Received RM500, with the remainder due on 9 June 2022.
31. Received RM3,000 for serving as a DJ for a party.
31. Paid RM1,400 royalties (music expense) to National Music for use of various artists' music during May.
31. Withdrew RM1,250 cash from Tree Hill Music for personal use.
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