Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for July. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). Merchandise inventory on July 31 $589,850 Insurance expired during the year 12,500 Store supplies on hand on July 314,700 Depreciation for the current year 18,800 Accrued salaries on July 31: Sales salaries $4,400 Office salaries 2,700 7,100 Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
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.
South Coast Boards Co. is a merchandising business. The account balances for South Coast
Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows:
|
110 |
Cash |
63,600 |
|
112 |
Account receivable |
153,900 |
|
115 |
Merchandise Inventory |
602,400 |
|
116 |
Prepaid Insurance |
16,800 |
|
117 |
Store Supplies |
11,400 |
|
123 |
Store Equipment |
469,500 |
|
124 |
Accumulated Depreciation—Store Equipment |
56,700 |
|
210 |
Accounts Payable |
96,000 |
|
211 |
Salaries Payable — |
|
|
310 |
Rocky Hansen, Capital, August 1, 2009 |
555,300 |
|
311 |
Rocky Hansen, Drawing |
135,000 |
|
312 |
Income Summary — |
|
|
410 |
Sales |
3,221,100 |
|
411 |
Sales returns and allowances |
92,700 |
|
412 |
Sales Discounts |
59,400 |
|
510 |
Cost of Merchandise Sold |
1,623,000 |
|
520 |
Sales Salaries Expense |
334,800 |
|
521 |
Advertising Expense |
81,000 |
|
522 |
Depreciation Expense |
|
|
523 |
Store Supplies Expense |
|
|
529 |
Miscellaneous Selling Expense |
12,600 |
|
530 |
Office Salaries Expense |
182,100 |
|
531 |
Office Salaries Expense |
83,700 |
|
532 |
Office Salaries Expense |
|
|
539 |
Miscellaneous Administrative Expense |
7800 |
During July, the last month of the fiscal year, the following transactions were completed: July Paid rent for July, $5,000.
- Purchased merchandise on account from Belmont Co., terms 2/10, n/30, FOB shipping point, $40,000.
- Paid freight on purchase of July 3, $ 600.
- Sold merchandise on account to Modesto Co., terms 2/10, n/30, FOB shipping point, $25,000. The cost of the merchandise sold was $15,000.
- Received $26,500 cash from Yuba Co. on account, no discount.
- Sold merchandise for cash, $80,000. The cost of the merchandise sold was $50,000.
- Paid for merchandise purchased on July 3, less discount.
- Received merchandise returned on sale of July 6, $6,000. The cost of the merchandise returned was $4,500.
- Paid advertising expense for last half of July, $7,500.
- Received cash from sale of July 6, less return of July 14 and discount.
- Purchased merchandise for cash, $36,000.
- Paid $18,000 to Bakke Co. on account, no discount.
- Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $25,000.
- For the convenience of the customer, paid freight on sale of July 20, $1,100.
- Received $17,600 cash from Owen Co. on account, no discount.
- Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $20,000.
- Returned $2,000 of damaged merchandise purchased on July 21, receiving credit from the seller.
- Refunded cash on sales made for cash, $3,000. The cost of the merchandise returned was $1,800.
- Paid sales salaries of $22,800 and office salaries of $15,200.
- Purchased store supplies for cash, $2,400.
- Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point,
$18,750. The cost of the merchandise sold was $11,250.
- Received cash from sale of July 20, less discount, plus freight paid on July 21.
- Paid for purchase of July 21, less return of July 24 and discount.
Instructions
- Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for July.
- Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
- At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
- Merchandise inventory on July 31 $589,850
- Insurance expired during the year 12,500
- Store supplies on hand on July 314,700
- Depreciation for the current year 18,800
- Accrued salaries on July 31:
Sales salaries $4,400
Office salaries 2,700 7,100
- Enter the unadjusted
trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
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