On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business: June 1. Kris transferred cash from a personal bank account to an account to be used for the business, $24,800. 4. Paid rent for period of June 4 to end of month, $2,410. 6. Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder. 8. Purchased equipment on account, $9,670. 10. Purchased supplies for cash, $1,660. 12. Paid annual premiums on property and casualty insurance, $3,720. 15. Received cash for job completed, $10,420. Enter the following transactions on Page 2 of the two-column journal: 23. Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,450. 24. Recorded jobs completed on account and sent invoices to customers, $11,850. 25. Received an invoice for truck expenses, to be paid in July, $1,090. 26. Paid utilities expense, $1,240. 27. Paid miscellaneous expenses, $450. 28. Received cash from customers on account, $4,960. 29. Paid wages of employees, $3,300. 30. Withdrew cash for personal use, $2,750. Required: 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank. 11 Cash 31 Kris Storey, Capital 12 Accounts Receivable 32 Kris Storey, Drawing 13 Supplies 41 Fees Earned 14 Prepaid Insurance 51 Wages Expense 16 Equipment 53 Rent Expense 18 Truck 54 Utilities Expense 21 Notes Payable 55 Truck Expense 22 Accounts Payable 59 Miscellaneous Expense General Journal Page 1 Date Description Post. Ref. Debit Credit 2019 June 1 June 4 June 6 June 8 June 10 June 12 June 15
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.
On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:
| June | 1. | Kris transferred cash from a personal bank account to an account to be used for the business, $24,800. |
| 4. | Paid rent for period of June 4 to end of month, $2,410. | |
| 6. | Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder. | |
| 8. | Purchased equipment on account, $9,670. | |
| 10. | Purchased supplies for cash, $1,660. | |
| 12. | Paid annual premiums on property and casualty insurance, $3,720. | |
| 15. | Received cash for job completed, $10,420. |
Enter the following transactions on Page 2 of the two-column journal:
| 23. | Paid creditor a portion of the amount owed for equipment purchased on June 13, $3,450. | |
| 24. | Recorded jobs completed on account and sent invoices to customers, $11,850. | |
| 25. | Received an invoice for truck expenses, to be paid in July, $1,090. | |
| 26. | Paid utilities expense, $1,240. | |
| 27. | Paid miscellaneous expenses, $450. | |
| 28. | Received cash from customers on account, $4,960. | |
| 29. | Paid wages of employees, $3,300. | |
| 30. | Withdrew cash for personal use, $2,750. |
Required:
1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank.
| 11 Cash | 31 Kris Storey, Capital |
| 12 Accounts Receivable | 32 Kris Storey, Drawing |
| 13 Supplies | 41 Fees Earned |
| 14 Prepaid Insurance | 51 Wages Expense |
| 16 Equipment | 53 Rent Expense |
| 18 Truck | 54 Utilities Expense |
| 21 Notes Payable | 55 Truck Expense |
| 22 Accounts Payable | 59 Miscellaneous Expense |
| General Journal | Page 1 | |||
|---|---|---|---|---|
| Date | Description | Post. Ref. | Debit | Credit |
| 2019 | ||||
| June 1 | ||||
| June 4 | ||||
| June 6 | ||||
| June 8 | ||||
| June 10 | ||||
| June 12 | ||||
| June 15 | ||||
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