Connie Young, an architect, opened an office on October 1, 2019. During the month, she completed the following transactions connected with her professional practice: Transferred cash from a personal bank account to an account to be used for the business, $67,200. Paid October rent for office and workroom, $6,700. Purchased used automobile for $44,000, paying $10,100 cash and giving a note payable for the remainder. Purchased office and computer equipment on account, $13,400. Paid cash for supplies, $3,230. Paid cash for annual insurance policies, $4,500. Received cash from client for plans delivered, $16,800. Paid cash for miscellaneous expenses, $1,820. Paid cash to creditors on account, $3,900. Paid $540 on note payable. Received invoice for blueprint service, due in November, $2,200. Recorded fees earned on plans delivered, payment to be received in November, $11,600. Paid salary of assistants, $3,600. Paid gas, oil, and repairs on automobile for October, $870. Required: 1. Record the above transactions (in chronological order) directly into the T accounts. To the left of the amount entered in the accounts, select the appropriate letter to identify the transaction. 2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance 3. Prepare an unadjusted trial balance for Connie Young, Architect, as of October 31, 2019. For those boxes in which no entry is required, leave the box blank. 4. Determine the net income or net loss for October.
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.
Connie Young, an architect, opened an office on October 1, 2019. During the month, she completed the following transactions connected with her professional practice:
- Transferred cash from a personal bank account to an account to be used for the business, $67,200.
- Paid October rent for office and workroom, $6,700.
- Purchased used automobile for $44,000, paying $10,100 cash and giving a note payable for the remainder.
- Purchased office and computer equipment on account, $13,400.
- Paid cash for supplies, $3,230.
- Paid cash for annual insurance policies, $4,500.
- Received cash from client for plans delivered, $16,800.
- Paid cash for miscellaneous expenses, $1,820.
- Paid cash to creditors on account, $3,900.
- Paid $540 on note payable.
- Received invoice for blueprint service, due in November, $2,200.
- Recorded fees earned on plans delivered, payment to be received in November, $11,600.
- Paid salary of assistants, $3,600.
- Paid gas, oil, and repairs on automobile for October, $870.
Required:
1. Record the above transactions (in chronological order) directly into the T accounts. To the left of the amount entered in the accounts, select the appropriate letter to identify the transaction.
2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance
3. Prepare an unadjusted
4. Determine the net income or net loss for October.
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