Please prepare journal entries for the following statements. You will also need to prepare the related T-accounts for each journal entry. Then you should prepare the trial balance, the adjusting entries, the financial statements and the closing entries. Additionally, for each account that you use in the journal entries, please indicate which component of the Accounting Equation this account belongs in (if this is unclear, please ask). 9/1/21 – Mary decides to open a new business. She has $20,000 to invest in the company, and she buys all 100 shares of stock. 9/1/21 – Mary borrows $90,000 from Suntrust Bank. This loan will be repaid in 3 years and will charge interest at 4% semi-annually. She will pay $3,600 per year. 9/1/21 – Mary hires an accountant and financial advisor to help manage her business and her money. She will pay her accountant an hourly rate of $90 per hour. 9/1/21 – Mary signs a contract to provide services to a local school district. She will provide services for 12 months and will receives $240,000 of the cash when she signs the contract on 9/1/21. 9/2/21 – Mary decides that she wants to have an office. She buys a small office in a local building. The office costs her $120,000. She pays $40,000 cash and the rest on account to be paid by December 31, 2021. 9/2/21 – Mary buys supplies for $7,500 and equipment for $10,500. She pays for the supplies with account and the equipment with cash. 9/4/21 – Mary hires an assistant and pays her assistant $3,000 per month. She will not pay the assistant his salary until 9/30/21, but pays him a signing bonus today of $3,000. 9/5/21 – Mary has a small fire at her office and unfortunately her supplies are totally burnt and will not usable. They will not provide her with any future benefit. 9/15/21 – Mary performs a consulting job for a client. She completed the assignment and earns $85,000. She received $20,000 in cash and will get the rest in October. 9/16/21 – Mary pays $20,000 of the amount that she owes on the building and she also pays for the supplies that were ruined. 9/30/21 – Mary pays her accountant $4,500 for services performed.
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.
Please prepare journal entries for the following statements. You will also need to prepare the related T-accounts for each
Additionally, for each account that you use in the journal entries, please indicate which component of the
- 9/1/21 – Mary decides to open a new business. She has $20,000 to invest in the company, and she buys all 100 shares of stock.
- 9/1/21 – Mary borrows $90,000 from Suntrust Bank. This loan will be repaid in 3 years and will charge interest at 4% semi-annually. She will pay $3,600 per year.
- 9/1/21 – Mary hires an accountant and financial advisor to help manage her business and her money. She will pay her accountant an hourly rate of $90 per hour.
- 9/1/21 – Mary signs a contract to provide services to a local school district. She will provide services for 12 months and will receives $240,000 of the cash when she signs the contract on 9/1/21.
- 9/2/21 – Mary decides that she wants to have an office. She buys a small office in a local building. The office costs her $120,000. She pays $40,000 cash and the rest on account to be paid by December 31, 2021.
- 9/2/21 – Mary buys supplies for $7,500 and equipment for $10,500. She pays for the supplies with account and the equipment with cash.
- 9/4/21 – Mary hires an assistant and pays her assistant $3,000 per month. She will not pay the assistant his salary until 9/30/21, but pays him a signing bonus today of $3,000.
- 9/5/21 – Mary has a small fire at her office and unfortunately her supplies are totally burnt and will not usable. They will not provide her with any future benefit.
- 9/15/21 – Mary performs a consulting job for a client. She completed the assignment and earns $85,000. She received $20,000 in cash and will get the rest in October.
- 9/16/21 – Mary pays $20,000 of the amount that she owes on the building and she also pays for the supplies that were ruined.
- 9/30/21 – Mary pays her accountant $4,500 for services performed.
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