At the beginning of April, Haron Kadir launched a custom computer solutions company called Softworks. The company had the following transactions during April. April Haron Kadir invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. The company purchased a portable building with $34,500 cash and moved it onto the land acquired on date 2nd. The company paid $5,000 cash for the premium on a two-year insurance policy. The company provided services to a client and immediately collected $4,600 cash. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. The company completed $4,250 of services for a client. This amount is to be received within 30 days. The company purchased $950 of additional office equipment on credit. The company completed client services for $10,200 on credit. The company received a bill for rent of a computer testing device that was used on a recently completed job. The $320 rent cost must be paid within 30 days. The company collected $5,100 cash in partial payment from the client described in transaction dated 9th. The company paid $1,800 cash for wages to an assistant. The company paid $950 cash to settle the payable created in transaction dated 8th. The company paid $608 cash for minor maintenance of the company’s computer equipment. Haroon Kadir withdrew $6,230 cash from the company for personal use. The company paid $1,800 cash for wages to an assistant. The company paid $750 cash for advertisements on the web during April. Required Prepare general journal entries to record these transactions (use account titles listed in part 2). Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Computer Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); H. Kadir Capital (301); H. Kadir Withdrawals (302); Fees Earned (402); Wages Expense (601); Computer Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting.
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.
At the beginning of April, Haron Kadir launched a custom computer solutions company called Softworks. The company had the following transactions during April.
April
- Haron Kadir invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company.
- The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000.
- The company purchased a portable building with $34,500 cash and moved it onto the land acquired on date 2nd.
- The company paid $5,000 cash for the premium on a two-year insurance policy.
- The company provided services to a client and immediately collected $4,600 cash.
- The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700.
- The company completed $4,250 of services for a client. This amount is to be received within 30 days.
- The company purchased $950 of additional office equipment on credit.
- The company completed client services for $10,200 on credit.
- The company received a bill for rent of a computer testing device that was used on a recently completed job. The $320 rent cost must be paid within 30 days.
- The company collected $5,100 cash in partial payment from the client described in transaction dated 9th.
- The company paid $1,800 cash for wages to an assistant.
- The company paid $950 cash to settle the payable created in transaction dated 8th.
- The company paid $608 cash for minor maintenance of the company’s computer equipment.
- Haroon Kadir withdrew $6,230 cash from the company for personal use.
- The company paid $1,800 cash for wages to an assistant.
- The company paid $750 cash for advertisements on the web during April.
Required
- Prepare general journal entries to record these transactions (use account titles listed in part 2).
- Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Computer Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); H. Kadir Capital (301); H. Kadir Withdrawals (302); Fees Earned (402); Wages Expense (601); Computer Rental Expense (602); Advertising Expense (603); and Repairs Expense (604).
Post the journal entries from part 1 to the accounts and enter the balance after each posting.
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