1 Received $40,000 cash as new stockholder investment. 3 Purchased inventory costing $8,000 on account from Dawkins Company, terms 2/10, n/30. 4 Purchased office supplies for $500 cash. 4 Held an office party for the retiring accountant. Balloons, hats, and refreshments cost $150 and were paid for with office staff contributions. May 5 Sold merchandise costing $7,500 on account for $14,000 to Richard Company, terms 3/15, n/30. 8 Paid employee wages of $2,000. Gross wages were $2,450; taxes totaling $450 were withheld. 9 Hired a new accountant; agreed to a first-year salary of $28,000. 9 Paid $1,500 for newspaper advertising. 10 Received payment from Richard Company. 12 Purchased a machine for $6,400 cash. 15 Declared a cash dividend totaling $25,000. 18 Sold merchandise costing $13,000 for $3,000 cash and $21,000 on account to Feynman Company, terms n/30. 19 Paid Dawkins Company account in full. 22 Company executives appeared on the cover of a national newsmagazine. Related article extolled Selfish Gene's labor practices, environmental concerns, and customer service. 23 Market value of Selfish Gene's common stock rose by $150,000. 25 Purchased a building for $15,000 cash and a $135,000 mortgage payable. 29 Paid dividends dedared on May 15.
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.
Selfish Gene Company is a merchandising firm. The following events occurred during the month of May. (Note: Selfish Gene maintains a perpetual inventory system.)
INSTRUCTIONS:
Record the preceding events in general journal form.
Which event do you think had the most significant economic impact on Selfish Gene Company? Are all economically relevant events recorded in the financial records?
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