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Final pro
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Final pro

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  • 1. ACCOUNTING CYCLE BY THAWBAN BAIG
  • 2. TABLE OF CONTENTS <ul><li>QUESTION # 2 </li></ul><ul><li>SOLUTION </li></ul><ul><ul><ul><li>JOURNAL GENERAL </li></ul></ul></ul><ul><ul><ul><li>LEDGER T-ACCOUNTS </li></ul></ul></ul><ul><ul><ul><li>ADJUSTMENTS </li></ul></ul></ul><ul><ul><ul><li>ADJUSTED TRIAL BALANCE </li></ul></ul></ul><ul><ul><ul><li>INCOME STATEMENT </li></ul></ul></ul><ul><ul><ul><li>STATEMENT OF RETAINED EARNINGS </li></ul></ul></ul>
  • 3. TABLE OF CONTENTS <ul><ul><ul><li>CLOSING ENTRIES </li></ul></ul></ul><ul><ul><ul><li>AFTER CLOSING TRIAL BALANCE </li></ul></ul></ul>
  • 4. JOURNAL GENERAL <ul><li>DEC 1 CASH 200,000 CAPITAL STOCK 200,000 </li></ul><ul><li> ISSUED 2000 SHARES OF </li></ul><ul><li> CAPITAL STOCK </li></ul><ul><li>DEC 1 EQUIPMENT 240,000 </li></ul><ul><li> NOTES PAYABLE 100,000 </li></ul><ul><li> CASH 140,000 </li></ul><ul><li> </li></ul><ul><li>PURCHASED EQUIPMENT AND </li></ul><ul><li> ISSUED NOTES PAYABLE </li></ul>DATE PARTICULARS Dr Cr
  • 5. JOURNAL GENERAL <ul><li>DEC 1 PREPAID RENT 12000 </li></ul><ul><li> CASH 12000 </li></ul><ul><li> PAID ADVANCE RENT </li></ul><ul><li>DEC 4 OFFICE SUPPLIES 1000 </li></ul><ul><li>AC.PAYABLE 1000 </li></ul><ul><li> PURCHASED OFFICE SUPPLIES ON ACCOUNT </li></ul>DATE PARTICULARS Dr Cr
  • 6. JOURNAL GENERAL <ul><li>DEC 8 CASH 8000 </li></ul><ul><li> UNEARNED RENTAL FEE 8000 </li></ul><ul><li>RECEIVED UNEARNED FEE </li></ul><ul><li>DEC 12 SALARIES EXPENSE 5200 </li></ul><ul><li> CASH 5200 </li></ul><ul><li>PAID SALARIES EXPENSE </li></ul>DATE PARTICULARS Dr Cr
  • 7. JOURNAL GENERAL <ul><li>DEC 15 CASH 12000 ACCOUNTS RECEIVABLE 6000 </li></ul><ul><li>EARNED RENTAL FEE 18000 EARNED FEE RECEIVED </li></ul><ul><li>DEC 17 MAINTENANCE EXPENSE 600 </li></ul><ul><li> ACCOUNTS PAYABLE 600 </li></ul><ul><li>PAID MAINTENANCE EXPENSE </li></ul>DATE PARTICULARS Dr Cr
  • 8. JOURNAL GENERAL <ul><li>DEC 23 CASH 2000 ACCOUNTS RECEIVABLE 2000 COLLECTED ACCOUNTS RECV. </li></ul><ul><li>DEC 23 ACCOUNTS RECEIVABLE 5250 </li></ul><ul><li> UNEARNED RENTAL FEE 5250 </li></ul><ul><li>RENTED A BACKHOE </li></ul>DATE PARTICULARS Dr Cr
  • 9. JOURNAL GENERAL <ul><li>DEC 26 SALARIES EXPENSE 5200 CASH 5200 </li></ul><ul><li>PAID BIWEEKLY SALARIES </li></ul><ul><li>DEC 27 ACCOUNTS PAYABLE 600 CASH 600 </li></ul><ul><li>PAID ACCOUNTS PAYABLE </li></ul>DATE PARTICULARS Dr Cr
  • 10. JOURNAL GENERAL <ul><li>DEC 28 DIVIDENTS 2000 DIVI.PAYABLE 2000 </li></ul><ul><li>10 CEN PER SHARE DIVIDENT </li></ul><ul><li>DEC 29 UNEXPIRED INSURANCE 9600 CASH 9600 PURCHASED INSUR. POLICY </li></ul>DATE PARTICULARS Dr Cr
  • 11. JOURNAL GENERAL <ul><li>DEC 31 UTILITIES EXPENSE 700 </li></ul><ul><li>A.PAYABLE 700 </li></ul><ul><li> RECEIVED UTILITIES BILL </li></ul><ul><li>DEC 31 CASH 15600 ACCOUNTS RECEIVABLE 4400 </li></ul><ul><li>EARNED RENTAL FEE 20000 </li></ul><ul><li>EARNED EQ. RENTAL FEE </li></ul>DATE PARTICULARS Dr Cr
  • 12. LEDGER T-ACCOUNTS Cash capital stock Dr Cr 200,000 140,000 8,000 12,000 12,000 5,200 2,000 5,200 15,600 600 9,600 172,600 65,000 237600 237600 237,600 Dr Cr 200,000 200,000 200,000 200,000
  • 13. LEDGER T-ACCOUNTS Rental equipment prepaid rent Dr Cr 240,000 240,000 240,000 240,000 Dr Cr 12,000 12,000 12,000 12,000
  • 14. LEDGER T-ACCOUNTS Notes payable office supplies Dr Cr 100,000 100,000 100,000 100,000 Dr Cr 1,000 1,000 1,000 1,000
  • 15. LEDGER T-ACCOUNTS Dividends Dividend payable Dr Cr 2,000 2,000 2,000 2,000 Dr Cr 2,000 2,000 2,000 2,000
  • 16. LEDGER T-ACCOUNTS unearned rental fee accounts payable Dr Cr 8,000 5,250 13,250 13,250 13,250 Dr Cr 600 1,000 600 700 17,00 2,300 2,300
  • 17. LEDGER T-ACCOUNTS Salaries expense maintenance expense Dr Cr 5,200 5,200 10,400 10,400 10,400 Dr Cr 600 600 600 600
  • 18. LEDGER T-ACCOUNTS Utilities expense accounts recievable Dr Cr 700 700 700 700 Dr Cr 6,000 2,000 5,250 4,400 13,650 15,650 15,650
  • 19. LEDGER T-ACCOUNTS earned rental fee unexpired insurance Dr Cr 18,000 20,000 38,000 38,000 38,000 Dr Cr 9,600 9,600 9,600 9,600
  • 20. ADJUSTMENTS DATE PARTICULARS Dr Cr A RENT EXPENSE 4000 PREPAID RENT 4000 ADVANCE PAYMENT OF RENT
  • 21. ADJUSTMENTS DATE PARTICULARS Dr Cr B INTEREST EXPENSE 6000 INTEREST PAYABLE 6000 THE ANNUAL INTEREST RATE ON NOTES PAYABLE
  • 22. ADJUSTMENTS DATE PARTICULARS Dr Cr C DEP. EXPENSE :RENTAL EQUIPMENT 2500 ACCUMULATED DEP:RENT EQUIP 2500 THE RENTAL EQUIPMENT BEING DEPRICIATED OVER PERIOD OF 8 YEARS
  • 23. ADJUSTMENTS DATE PARTICULARS Dr Cr D SUPPLIES EXPENSE 400 OFFICE SUPPLIES 400 OFFICE SUPPLIES ON HAND AT 31 DEC
  • 24. ADJUSTMENTS Date Particulars DR CR E UNEARNED RENTAL FEE 3700 EARNED RENTAL FEE 3700 THE COMPANY EARNED 3700 RENTAL FEE PAID IN ADVANCE
  • 25. ADJUSTMENTS DATE PARTICULARS Dr Cr F UNEARNED RENTAL FEE 1500 EARNED RENTAL FEE 1500 6 DAYS RENT ON BACKHOE HAS BEEN EARNED
  • 26. ADJUSTMENTS DATE PARTICULARS Dr Cr G SALARIES EXPENSE 1400 SALARIES PAYABLE 1400 SALARIES EARNED BY EMPLOYEES
  • 27. ADJUSTMENTS DATE PARTICULARS Dr Cr H INCOME TAX EXPENSE 10520 INCOME TAX PAYABLE 10520 COMBINED STATE AND FEDERAL INCOME TAX
  • 28. OFFICE SUPPLIES PREPAID OFFICE RENT T-ACCOUNTS AFTER ADJUSTMENTS Dr Cr 1,000 400 600 1000 1000 Dr Cr 12,000 4000 8000 12,000 12000
  • 29. T-ACCOUNTS AFTER ADJUSTMENTS ACCUMULATED DEP: OFFICE EQUIP INTEREST PAYABLE Dr Cr 2,500 2,500 2,500 2,500 Dr Cr 6,000 6,000 6,000 6,000
  • 30. T-ACCOUNTS AFTER ADJUSTMENTS INCOME TAX PAYABLE SALARIES PAYABLE Dr Cr 10,520 10,520 10,520 10,520 Dr Cr 1,400 1,400 1,400 1,400
  • 31. UNEARNED RENTAL FEE DIVIDENDS T-ACCOUNTS AFTER ADJUSTMENTS Dr Cr 8,000 5200 5,250 8050 13250 13250 Dr Cr 2,000 2,000 2,000 2,000
  • 32. T-ACCOUNTS AFTER ADJUSTMENTS Earned rental fee Salaries expense Dr Cr 18,000 20,000 5200 43200 43200 43200 Dr Cr 5,200 5,200 1400 11800 11800 11800
  • 33. T-ACCOUNTS AFTER ADJUSTMENTS Interest expense Income tax expense Dr Cr 6,000 6,000 6,000 6,000 Dr Cr 10520 10520 10520 10520
  • 34. T-ACCOUNTS AFTER ADJUSTMENTS RENT EXPENSE SUPPLIES EXPENSE Dr Cr 4000 4000 4000 4000 Dr Cr 400 400 400 400
  • 35. T-ACCOUNTS AFTER ADJUSTMENTS DEP.EXP:RENTAL EQUIPMENT Dr Cr 2500 2500 2500 2500
  • 36. INCOME STATEMENT <ul><li>REVENUE: </li></ul><ul><li>RENTAL FEE REVENUE………………………………………………………………………………43200 </li></ul><ul><li>EXPENSES: </li></ul><ul><li>MAINTENANCE EXPENSE 600 </li></ul><ul><li>UTILITIES EXPENSE 700 </li></ul><ul><li>SALARIES EXPENSE 11,800 </li></ul><ul><li>INTEREST EXPENSE 6,000 </li></ul><ul><li>RENT EXPENSE 4,000 </li></ul><ul><li>SUPPLIES EXPENSE 400 </li></ul><ul><li>DEP EXPENSE: RENTAL EQUIPMENT 2500 </li></ul><ul><li>INCOME TAXES EXPENSE 10520 </li></ul><ul><li>NET INCOME 6680 </li></ul>
  • 37. STATEMENT RETAINED EARNING <ul><li>REVENUE: </li></ul><ul><li>RENTAL FEE REVENUE………………………………………………………………………………43200 </li></ul><ul><li>EXPENSES: </li></ul><ul><li>MAINTENANCE EXPENSE 600 </li></ul><ul><li>UTILITIES EXPENSE 700 </li></ul><ul><li>SALARIES EXPENSE 11,800 </li></ul><ul><li>INTEREST EXPENSE 6,000 </li></ul><ul><li>RENT EXPENSE 4,000 </li></ul><ul><li>SUPPLIES EXPENSE 400 </li></ul><ul><li>DEP EXPENSE: RENTAL EQUIPMENT 2500 </li></ul><ul><li>DIVIDENDS 2000 </li></ul><ul><li>RETAINED EARNINGS 4680 </li></ul>
  • 38. CLOSING ENTRIES
  • 39. CLOSING ENTRIES AND THERE LEDGERS <ul><li>RENTAL FEE EARNED 43200 </li></ul><ul><li>INCOME SUMMARY 43200 </li></ul>RENTAL FEE EARNED 43200 INCOME SUMMARY 43200
  • 40. CLOSING ENTRIES AND THERE LEDGERS <ul><li>INCOME SUMMARY…………………………………36520 </li></ul><ul><li>MAINTENANCE EXP 600 </li></ul><ul><li>UTILITIES EXPENSE 700 </li></ul><ul><li>SALARIES EXP 11800 </li></ul><ul><li>INTEREST EXP 6000 </li></ul><ul><li>INCOME TAX EXP 10520 </li></ul><ul><li>RENT EXP 4000 </li></ul><ul><li>SUPPLIES EXP 400 </li></ul><ul><li> DEP EXP:EQUIPMENT 2500 </li></ul>
  • 41. CLOSING ENTRIES AND THERE LEDGERS EXPENSE ACCOUNT INCOME SUMMARY 36520 36520
  • 42. CLOSING ENTRIES AND THERE LEDGERS <ul><li>INCOME SUMMARY ……………………………………6680 </li></ul><ul><li>RETAINED EARNINGS………………………………6680 </li></ul>INCOME SUMMARY RETAINED EARNING 43200(REV) 36520(EXP) 6680 6680(income) 6680(income)
  • 43. CLOSING ENTRIES AND THERE LEDGERS <ul><li>CLOSING THE DIVIDENDS ACCOUNTS </li></ul><ul><li>RETAINED EARNINGS……………………………………2000 </li></ul><ul><li>DIVIDENDS………………………………………………..2000 </li></ul>DIVIDEND RETAINED EARNINGS 2000 2000 2000 6680(income) 4680
  • 44. worksheet <ul><li>WORK SHEET ACCOUNTING.xls </li></ul>
  • 45.  

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