PARK WOODS Inc., a real estate developer, recently has its Articles of Incorporation approved by the Securities and Exchange Commission. It authorized the corporation to issue 50,000 of P100 par value common stock. The following stock transactions took place prior to its operation: Jan. 1 Sold 20,000 shares of its common stock at par to its incorporators: Honey Perez (4,000 shares), Brenda Woods (4,200 shares); Olive Russell (4,800 shares); Merlinda Brown (3,000 shares) and Ramon Baltazar (4,000 shares). Each one gave a 30% down payment. 15 Sold 10,000 shares of its common stock for Pl,200,000. Feb. 20 Issued the maximum number of common shares to Mr. Villar in exchange for land at Greenfield, which had a fair market value of PS00,000. 21 Issued a total of 1,000 shares of stock for services billed by the corporate lawyer and accountant at PS5,000 and P45,000 respectively in organizing the company. 22 Owen, a shareholder, received 1,500 shares in exchange for equipment having a book value of P225,000 and a market value of PI75,000. Mar. 25 Noah subscribed to 500 shares at 120% of the par value and paid 50%. 27 Baltazar paid for his subscription balance in the form of merchandise and received a stock certificate 28 The other incorporators paid half of their subscription balance. 31 Operation yielded a credit balance to the income summary, P500,000. Direction: a. Journal entries using the memorandum entry method. Date Particulars Debit Credit
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
