Creative Kitchens began operations March 1, 20X1. The firm sells its merchandise for cash and on open account. Sales are subject to a 6 percent sales tax. The terms for all sales on credit are net 30. During March, Creative Kitchens engaged in the following transactions: DATE Sold merchandise on credit to Candy Martinez; issued Sales Slip 103 for $1,050 plus sales tax of $63. Recorded cash sales for the period from March 1 to March 15 of $6,800 plus sales tax of $408. March 1, 20X1 Sold merchandise on credit to Bob D'Angelo; issued Sales Slip 101 for $500 plus sales tax of $30. March 4, 20X1 Sold merchandise on credit to Geeta Anchal; issued Sales Slip 102 for $850 plus sales tax of $51. March 12, 20X1 March 15, 20X1 March 25, 20X1 Sold merchandise on credit to Jack O'Donnell; issued Sales Slip 104 for $800 plus sales tax of $48. March 28, 20X1 Received a check from Geeta Anchal of $140 to apply toward his account. March 31, 20X1 Recorded cash sales for the period from March 16 to March 31 of $3,700 plus sales tax of $222. March 31, 20X1 Received payment in full from Bob D'Angelo for the sale of March 1. TRANSACTIONS Required: 2. Record the transactions in a general journal. 3. Post the entries from the general journal to the appropriate general ledger accounts. GENERAL LEDGER ACCOUNTS 101 Cash, $12,920 Debit 111 Accounts Receivable 221 Sales Tax Payable 401 Sales Analyze: What were the total cash receipts during March?
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.
Analyze:
What were the total cash receipts during March?
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