Halogen Laminated Products Company began business on January 1, 2021. During January, the following transactions occurred: Jan. 1 Issued common stock in exchange for $101,000 cash. 2 Purchased inventory on account for $36,000 (the perpetual inventory system is used). 4 Paid an insurance company $2,520 for a one-year insurance policy. Prepaid insurance was debited for the entire amount. 10 Sold merchandise on account for $12,100. The cost of the merchandise was $7,100. 15 Borrowed $31,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. 20 Paid employees $6,100 salaries for the first half of the month. 22 Sold merchandise for $10,100 cash. The cost of the merchandise was $6,100. 24 Paid $15,100 to suppliers for the merchandise purchased on January 2. 26 Collected $6,050 on account from customers. 28 Paid $1,100 to the local utility company for January gas and electricity. 30 Paid $4,100 rent for the building. $2,050 was for January rent, and $2,050 for February rent. Prepaid rent and rent expense were debited for their appropriate amounts. Required: 1. Prepare general journal entries to record each transaction. 2. Post the transactions into the appropriate T-accounts. 3. Prepare an unadjusted trial balance as of January 30, 2021.
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.
Halogen Laminated Products Company began business on January 1, 2021. During January, the following transactions occurred:
| Jan. | 1 | Issued common stock in exchange for $101,000 cash. | ||
| 2 | Purchased inventory on account for $36,000 (the perpetual inventory system is used). | |||
| 4 | Paid an insurance company $2,520 for a one-year insurance policy. Prepaid insurance was debited for the entire amount. | |||
| 10 | Sold merchandise on account for $12,100. The cost of the merchandise was $7,100. | |||
| 15 | Borrowed $31,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. | |||
| 20 | Paid employees $6,100 salaries for the first half of the month. | |||
| 22 | Sold merchandise for $10,100 cash. The cost of the merchandise was $6,100. | |||
| 24 | Paid $15,100 to suppliers for the merchandise purchased on January 2. | |||
| 26 | Collected $6,050 on account from customers. | |||
| 28 | Paid $1,100 to the local utility company for January gas and electricity. | |||
| 30 | Paid $4,100 rent for the building. $2,050 was for January rent, and $2,050 for February rent. Prepaid rent and rent expense were debited for their appropriate amounts. |
Required:
1. Prepare general
2.
3. Prepare an unadjusted
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