The following transactions pertain to Smith Training Company for Year 1: January 30 Established the business when it acquired $51,000 cash from the issue of common stock. February 1 Paid rent for office space for two years, $33,000 cash.
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.
The following information applies to the questions displayed below.]
The following transactions pertain to Smith Training Company for Year 1:
| January 30 | Established the business when it acquired $51,000 cash from the issue of common stock. |
|---|---|
| February 1 | Paid rent for office space for two years, $33,000 cash. |
| April 10 | Purchased $800 of supplies on account. |
| July 1 | Received $22,500 cash in advance for services to be provided over the next year. |
| July 20 | Paid $600 of the accounts payable from April 10. |
| August 15 | Billed a customer $10,000 for services provided during August. |
| September 15 | Completed a job and received $3,400 cash for services rendered. |
| October 1 | Paid employee salaries of $37,500 cash. |
| October 15 | Received $9,500 cash from accounts receivable. |
| November 16 | Billed customers $31,000 for services rendered on account. |
| December 1 | Paid a dividend of $1,200 cash to the stockholders. |
| December 31 | Adjusted records to recognize the services provided on the contract of July 1. |
| December 31 | Recorded $2,250 of accrued salaries as of December 31. |
| December 31 | Recorded the rent expense for the year. (See February 1.) |
| December 31 | Physically counted supplies; $110 was on hand at the end of the period. |
d. Prepare the income statement,
statement of changes in
statement of cash flows for Year 1.
Note: Statement of Cash Flows only, enter any decreases to account balances and
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