On April 1, Jose Garcia created a new travel agency, Garcia Travel. The following transactions occurred during the company’s first month. April 2 Garcia invested $38,000 cash and computer equipment worth $11,400 in the company in exchange for its common stock. April 3 The company rented furnished office space by paying $2,600 cash for the first month’s (April) rent. April 4 The company purchased $1,200 of office supplies for cash. April 10 The company paid $1,800 cash for a 12-month insurance policy. Coverage begins on April 11. April 14 The company paid $1,540 cash for two weeks’ salaries earned by employees. April 24 The company collected $24,000 cash for commissions revenue. April 28 The company paid $1,540 cash for two weeks’ salaries earned by employees. April 29 The company paid $650 cash for minor repairs to computer equipment. April 30 The company paid $400 cash for this month’s telephone bill. April 30 The company paid $1,700 cash in dividends. Information for month-end adjustments follows: Prepaid insurance of $100 expired this month. At the end of the month, $600 of office supplies are still available. This month’s depreciation on computer equipment is $190. Employees earned $616 of unpaid and unrecorded salaries as of month-end. The company earned $1,830 of commissions revenue that is not yet General Journal tab - Prepare journal entries for Garcia Travel's first month of operations. Prepare any necessary adjusting and closing entries for the current month. General Ledger tab - Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Trial Balance tab - You may view the unadjusted, adjusted, or post-closing trial balances by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs.
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.
On April 1, Jose Garcia created a new travel agency, Garcia Travel. The following transactions occurred during the company’s first month.
| April 2 | Garcia invested $38,000 cash and computer equipment worth $11,400 in the company in exchange for its common stock. |
|---|---|
| April 3 | The company rented furnished office space by paying $2,600 cash for the first month’s (April) rent. |
| April 4 | The company purchased $1,200 of office supplies for cash. |
| April 10 | The company paid $1,800 cash for a 12-month insurance policy. Coverage begins on April 11. |
| April 14 | The company paid $1,540 cash for two weeks’ salaries earned by employees. |
| April 24 | The company collected $24,000 cash for commissions revenue. |
| April 28 | The company paid $1,540 cash for two weeks’ salaries earned by employees. |
| April 29 | The company paid $650 cash for minor repairs to computer equipment. |
| April 30 | The company paid $400 cash for this month’s telephone bill. |
| April 30 | The company paid $1,700 cash in dividends. |
Information for month-end adjustments follows:
- Prepaid insurance of $100 expired this month.
- At the end of the month, $600 of office supplies are still available.
- This month’s
depreciation on computer equipment is $190. - Employees earned $616 of unpaid and unrecorded salaries as of month-end.
- The company earned $1,830 of commissions revenue that is not yet
General Journal tab - Prepare journal entries for Garcia Travel's first month of operations. Prepare any necessary adjusting and closing entries for the current month.
General Ledger tab - Each
Income Statement tab - Use the drop-downs to select the accounts properly included on the income statement. The unadjusted, adjusted or post-closing balances will appear for each account, based on your selection.
Statement of
Post-Closing tab - Use the drop-downs to indicate whether each account is included on the post-closing trial balance.
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