PROBLEM On January 1 of the current year, Juan David opened the " J.D Men's Wear Shop", and during the month, the following transactions were completed: Jan. 1 Juan David invested cash P 80,000 in the business. He bought two sewing machines amounting P 30,000 each from Patio Merchandising, the he gave P15,000 down and the balance is payable within 60 days. Paid a three month rental of the shop, P30,000. This was charged to 1 1 prepaid Rent account. 1 Paid a one year insurance policy, P 5,700. Bought sewing tools P 5,900 and sewing supplies P 2,700 from Jomar Trading on credit. Received P 1,200 from customer for a short delivered. Billed to Maricris Acosta, P 5,000 for two-pair of pants and polo barong 7 delivered. 10 Purchased clothing materials from Baclaran Market and paid P 15,000 cash. 13 Received P 12,500 from various customers for pants and barong made and delivered. 14 Gave Patio Merchandising P 15,000 and issued a 60-day, 6% note for the balance. 15 Paid the wages of the shop helper, P 2,500. Juan David withdrew P 5,000 for his personal use. M. Acosta gave P 2,000 as partial payment of his account. Received P 14,750 from various customers pants and shirts delivered. 17 18 20 22 Paid the wages of the shop helper, P 2,500. Billed Joevanie Garcia P 4,000 for barong and pants delivered t him. Paid the following monthly expenses: utility bills, P 1,500; telephone bill, P 23 27 2,500. At the end of accounting period, the following data were taken: 1. The sewing machines are estimated to have a 5-year useful life. 2. The actual count of sewing supplies revealed a balance of P 1,700. 3. The business is conservative to estimate a 5% of the receivables to be uncollected. 4. Balance of the clothing materials account is P 7,000.
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.
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