The Metlock, Inc. opened on April 1. All facilities were completed on March 31. At this time, the ledger showed No. 101 Cash $7,870, No. 140 Land $10,130, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $6,130, No. 157 Equipment $7,870, No. 201 Accounts Payable $3,870, No. 275 Mortgage Payable $8,130, and No. 311 Common Stock $20,000. During April, the following events and transactions occurred. Apr. 2 Paid film rental of $1,890 on first movie. 3 Ordered two additional films at $1,960 each. 9 Received $2,490 cash from admissions. 10 Made $2,360 payment on mortgage and $1,130 for accounts payable due. 11 Metlock, Inc. contracted with Dever Company to operate the concession stand. Dever is to pay 18% of gross concession receipts (payable monthly) for the rental of the concession stand. 12 Paid advertising expenses $400. 20 Received one of the films ordered on April 3 and was billed $1,960. The film will be shown in April. 25 Received $5,300 cash from admissions. 29 Paid salaries $1,700. 30 Received statement from Dever showing gross concession receipts of $2,800 and the balance due to The Metlock, Inc. of $504 ($2,800 × 18%) for April. Dever paid one-half of the balance due and will remit the remainder on May 5. 30 Prepaid $840 rental on special film to be run in May. In addition to the accounts identified above, the chart of accounts shows No. 112 Accounts Receivable, No. 136 Prepaid Rent, No. 400 Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense. (a) Enter the beginning balances in the ledger as of April 1.
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.
Problem 2-05A a-d (Part Level Submission)
The Metlock, Inc. opened on April 1. All facilities were completed on March 31. At this time, the ledger showed No. 101 Cash $7,870, No. 140 Land $10,130, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $6,130, No. 157 Equipment $7,870, No. 201 Accounts Payable $3,870, No. 275 Mortgage Payable $8,130, and No. 311 Common Stock $20,000. During April, the following events and transactions occurred.
Apr. 2
Paid film rental of $1,890 on first movie.
3
Ordered two additional films at $1,960 each.
9
Received $2,490 cash from admissions.
10
Made $2,360 payment on mortgage and $1,130 for accounts payable due.
11
Metlock, Inc. contracted with Dever Company to operate the concession stand. Dever is to pay 18% of gross concession receipts (payable monthly) for the rental of the concession stand.
12
Paid advertising expenses $400.
20
Received one of the films ordered on April 3 and was billed $1,960. The film will be shown in April.
25
Received $5,300 cash from admissions.
29
Paid salaries $1,700.
30
Received statement from Dever showing gross concession receipts of $2,800 and the balance due to The Metlock, Inc. of $504 ($2,800 × 18%) for April. Dever paid one-half of the balance due and will remit the remainder on May 5.
30
Prepaid $840 rental on special film to be run in May.
In addition to the accounts identified above, the chart of accounts shows No. 112
(a)
Enter the beginning balances in the ledger as of April 1.
Cash
No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Land
No. 140
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Buildings
No. 145
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Equipment
No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Accounts Payable
No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Mortgage Payable
No. 275
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
Common Stock
No. 311
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
√
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