1. Enter the balances of each of the accounts as of November 30 in the appropriate balance column of a T account (use account names and numbers) or a four-column account. [You are creating the General Ledger.] 2. Journalize (using the General Journal) the transactions for December. 3. Post the December journal entries to the General Ledger, computing the year-end balances after all posting is completed. 4. Prepare an Unadjusted Trial Balance as of December 31. 5. Analyze the following adjustment data assembled at the end of December. Use the adjustment data to journalize, then post, the necessary adjusting entries. -a. Merchandise inventory on hand at December 31, per physical count, $248,315. -b. Insurance coverage expired during the year, $12,350. -c. Supplies on hand at December 31, $2,100. -d. Additional depreciation to be recorded on the equipment for the year, $14,130. -e. Accrued sales salaries $1,800 and accrued office salaries $890 on December 31 -f. Accrued interest on the note payable as of December 31, $240. -g. Unearned Rent at December 31 is $8,300. -h. Company estimates that customers will request an additional $12,830 of refunds related to current year sales and the related merchandise to be costing $5,900 will be returned. 6. Prepare an Adjusted Trial Balance as of December 31. 7. Prepare, in good form, a multiple-step Income Statement, a Retained Earnings Statement, and a classified Balance Sheet at the end of the December 31 fiscal year. Retained earnings as of 11/30 equaled retained earnings as of beginning of the fiscal year (1/1). 8. Journalize and post the necessary closing entries. 9. Prepare a Post-Closing Trial Balance as of December 31.
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.
Comprehensive Problem
INSTRUCTIONS: Solve the problem below clearly, orderly, accurately, and completely using Excel. (You may use a pencil/paper T account General Ledger, if you prefer.)
Pacheco Inc. is a merchandising business headquartered in the U.S. and selling primarily to wholesalers. The
Principles (GAAP). Business activity is recorded on an accrual basis. The company employs the perpetual inventory system in accounting for its merchandise inventory. Sales revenue is recorded net of sales
discounts. Purchases of inventory are also recorded net of purchases discounts. The company operates using a January through December fiscal year. The balances of the accounts in the general ledger as of
November 30 of the current fiscal year are as follows: SEE ATTACHED IMAGES FOR ACCOUNTS
There are 100,000 shares of common stock outstanding. During December, the last month of the fiscal year, the following transactions were completed:
-Dec 3 Purchased $24,500 of merchandise on account, FOB shipping point, terms
2/10,n/30.
-Dec 4 Paid transportation costs of $475 on the December 3 purchase.
-Dec 7 Returned $4,000 of the merchandise purchased on December 3.
-Dec 11 Sold merchandise on account, $12,700, FOB destination, 1/15,n/30. The cost of the merchandise
sold was $7,600.
-Dec 12 Paid transportation charges of $300 for the merchandise sold on December 11.
-Dec 13 Paid for the purchase of December 3 less the return and the discount.
-Dec 15 Received payment from customers on account, $8,430. Amount received is net of discount.
-Dec 22 Received payment on account for the sale of December 11, less the discount.
-Dec 23 Purchased supplies on account, n/30 $500.
-Dec 26 Paid amounts owed to creditors on account, $9,040. Amount paid was net of discount.
-Dec 27 Paid sales salaries, $2,300, and office salaries, $1,400.
-Dec 28 Sold merchandise for cash, $16,500. The cost of the merchandise sold was $11,200.
-Dec 29 Paid customer a cash refund of $2,210 for returned merchandise from the sale of Dec. 11. The cost
of the returned merchandise was $1,212.
-Dec 30 Paid rent for store equipment for December, $1,000.
-Dec 31 Paid cash for a web page advertisement, $400
1. Enter the balances of each of the accounts as of November 30 in the appropriate balance column of a T account (use account names and numbers) or a four-column account. [You are creating the General
Ledger.]
2. Journalize (using the General Journal) the transactions for December.
3. Post the December
posting is completed.
4. Prepare an Unadjusted
5. Analyze the following adjustment data assembled at the end of December. Use the adjustment data to journalize, then post, the necessary
-a. Merchandise inventory on hand at December 31, per physical count, $248,315.
-b. Insurance coverage expired during the year, $12,350.
-c. Supplies on hand at December 31, $2,100.
-d. Additional
-e. Accrued sales salaries $1,800 and accrued office salaries $890 on December 31
-f. Accrued interest on the note payable as of December 31, $240.
-g. Unearned Rent at December 31 is $8,300.
-h. Company estimates that customers will request an additional $12,830 of refunds related to current year
sales and the related merchandise to be costing $5,900 will be returned.
6. Prepare an Adjusted Trial Balance as of December 31.
7. Prepare, in good form, a multiple-step Income Statement, a
8. Journalize and post the necessary closing entries.
9. Prepare a Post-Closing Trial Balance as of December 31.
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