Prepare journal entries for the following transactions from Forest Furniture. Oct. 3 Sold 2 couches with a sales price of $2,450 per couch to customer Norman Guzman. Norman Guzman paid with his Draw Plus credit card. The Draw Plus credit card charges Forest Furniture a 3.5% usage fee based on the total sale per transaction. The cost for this sale is $1,700 per couch. Oct. 6 Sold 4 end chairs for a total sales price of $1,250 to April Orozco. April paid in full with cash. The cost of the sale is $800. Oct. 9 Sold 18 can lights with a sales price of $50 per light to customer James Montgomery. James Montgomery paid using his Fund Max credit card. Fund Max charges Forest Furniture a 2.4% usage fee based on the total sale per transaction. The cost for this sale is $29 per light. Oct. 12 Draw Plus made a cash payment in full to Forest Furniture for the transaction from Oct 3, less any usage fees. Oct. 15 Fund Max made a cash payment of 25% of the total due to Forest Furniture for the transaction from October 9th, less any usage fees. Oct. 25 Fund Max made a cash payment of the remainder due to Forest Furniture for the transaction from October 9, less any usage fees.
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.
Prepare
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Oct. 3 |
Sold 2 couches with a sales price of $2,450 per couch to customer Norman Guzman. Norman Guzman paid with his Draw Plus credit card. The Draw Plus credit card charges Forest Furniture a 3.5% usage fee based on the total sale per transaction. The cost for this sale is $1,700 per couch. |
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Oct. 6
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Sold 4 end chairs for a total sales price of $1,250 to April Orozco. April paid in full with cash. The cost of the sale is $800. |
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Oct. 9 |
Sold 18 can lights with a sales price of $50 per light to customer James Montgomery. James Montgomery paid using his Fund Max credit card. Fund Max charges Forest Furniture a 2.4% usage fee based on the total sale per transaction. The cost for this sale is $29 per light. |
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Oct. 12 |
Draw Plus made a cash payment in full to Forest Furniture for the transaction from Oct 3, less any usage fees. |
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Oct. 15 |
Fund Max made a cash payment of 25% of the total due to Forest Furniture for the transaction from October 9th, less any usage fees. |
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Oct. 25 |
Fund Max made a cash payment of the remainder due to Forest Furniture for the transaction from October 9, less any usage fees. |
Journal Entries records business transactions in chronological manner and it is the first step in accounting cycle.
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