lize the following transactions for June. Dean Winchester opened Ghost Cleaners on June 1, 2021. He is the sole owner of the corporation. During June, the following transactions were completed by Dean. 1-Jun Invested $65,000 in exchange for common stock in Ghost Cleaners, Inc. 1-Jun Purchased a used van for $12,000, paying $3,000 cash and the taking out a note payable for the rest. He plans to pay off the remaining balance on the van by June 1, 2022. The note has a 10% APR with interest being payable at the end of every month. No principle payments are due until August 1, 2021. 1-Jun Paid $1,800 cash on a 12-month insurance policy effective June 1, 2021. 1-Jun Hired his brother, Sam, to help with the corporation. He will be paid $1,000 per month for now. 5-Jun Purchased cleaning supplies for $1,500 on account. 7-Jun Billed a client, F. Crowley, for services performed on June 7
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.
Part A: Journalize the following transactions for June.
Dean Winchester opened Ghost Cleaners on June 1, 2021. He is the sole owner of the corporation.
During June, the following transactions were completed by Dean.
1-Jun Invested $65,000 in exchange for common stock in Ghost Cleaners, Inc.
1-Jun Purchased a used van for $12,000, paying $3,000 cash and the taking out a note payable for the rest.
He plans to pay off the remaining balance on the van by June 1, 2022. The note has a 10% APR
with interest being payable at the end of every month. No principle payments are due until August 1, 2021.
1-Jun Paid $1,800 cash on a 12-month insurance policy effective June 1, 2021.
1-Jun Hired his brother, Sam, to help with the corporation. He will be paid $1,000 per month for now.
5-Jun Purchased cleaning supplies for $1,500 on account.
7-Jun Billed a client, F. Crowley, for services performed on June 7 in the amount of $3,000.
8-Jun Paid $100 for gasoline for the van.
12-Jun Paid $200 for maintenance on the van.
15-Jun Incurred wages expense of $2,000.
16-Jun Received payment of $3,000 for services performed on June 7.
18-Jun Paid $1,500 of accounts payable off for cleaning supplies purchased on June 5th.
20-Jun Billed a client, J. Mills, for services performed on June 20 in the amount of $8,000.
26-Jun Received payment of $4,000 for services performed on June 20.
30-Jun Paid employee wages incurred on June 15 in full.
30-Jun Paid interest on the van note payable for June in the amount of $75.
Part B: Post the above transactions to the appropriate general ledger accounts and find balances.
Part C: Prepare a
Part D: Journalize and post to general ledger accounts the following adjustments for June:
1. Depreciation on the van was $200.
2. Services performed for a client, B. Singer, but unbilled as of June 30 totaled $3,500.
3. Insurance expired by one month.
4. Wages expense incurred but unpaid as of June 30 totaled $1,700.
5. Supplies used during the month totaled $700.
6. A dividend was declared for $1,000 at June 30 but remained unpaid at June 30.
Part E: Prepare an adjusted trial balance as of June 30, 2021.
Part F: Prepare an income statement, statement of retained earnings, and classified balance sheet for
Ghost Cleaners, Inc. for June 30, 2021.
Part G: Journalize and
Part H: Prepare a post-closing trial balance as of June 30, 2021.
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