Ramon opened the Quarantine Gym in August. The Following transactions occurred during the first month of the business: a) Ramon invested P100,000 in cash and 30,000 in gym equipment in the business. b) Paid P10,000 for the first month’s rent. c) Purchased supplies costing P4,000 on credit. d) Purchased exercise equipment costing P25,000. e) Recorded income for the first half of the month of P6,500 in cash and P3,500 on account. f) Received payment from a customer on account for P1600. g) Ramon withdrew P500 for a graduation gift. h) Paid aerobics instructor her salary, P3,000. i) Paid miscellaneous expense P1,500 j) Recorded income for the second half of the month of P5,600 in cash. Use the double-entry method in the accounting equation to record each of the above transactions. Summarize the final value of each account under Assets, Liabilities and Capital. Prepare a Balance Sheet of Quarantine Gym as of August 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.
Ramon opened the Quarantine Gym in August. The Following transactions occurred during
the first month of the business:
a) Ramon invested P100,000 in cash and 30,000 in gym equipment in the business.
b) Paid P10,000 for the first month’s rent.
c) Purchased supplies costing P4,000 on credit.
d) Purchased exercise equipment costing P25,000.
e) Recorded income for the first half of the month of P6,500 in cash and P3,500 on
account.
f) Received payment from a customer on account for P1600.
g) Ramon withdrew P500 for a graduation gift.
h) Paid aerobics instructor her salary, P3,000.
i) Paid miscellaneous expense P1,500
j) Recorded income for the second half of the month of P5,600 in cash.
Use the double-entry method in the
transactions. Summarize the final value of each account under Assets, Liabilities and
Capital. Prepare a Balance Sheet of Quarantine Gym as of August 31.
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