Final pro

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Final pro

  1. 1. ACCOUNTING CYCLE BY THAWBAN BAIG
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 20. ADJUSTMENTS DATE PARTICULARS Dr Cr A RENT EXPENSE 4000 PREPAID RENT 4000 ADVANCE PAYMENT OF RENT
  21. 21. ADJUSTMENTS DATE PARTICULARS Dr Cr B INTEREST EXPENSE 6000 INTEREST PAYABLE 6000 THE ANNUAL INTEREST RATE ON NOTES PAYABLE
  22. 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. 23. ADJUSTMENTS DATE PARTICULARS Dr Cr D SUPPLIES EXPENSE 400 OFFICE SUPPLIES 400 OFFICE SUPPLIES ON HAND AT 31 DEC
  24. 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. 25. ADJUSTMENTS DATE PARTICULARS Dr Cr F UNEARNED RENTAL FEE 1500 EARNED RENTAL FEE 1500 6 DAYS RENT ON BACKHOE HAS BEEN EARNED
  26. 26. ADJUSTMENTS DATE PARTICULARS Dr Cr G SALARIES EXPENSE 1400 SALARIES PAYABLE 1400 SALARIES EARNED BY EMPLOYEES
  27. 27. ADJUSTMENTS DATE PARTICULARS Dr Cr H INCOME TAX EXPENSE 10520 INCOME TAX PAYABLE 10520 COMBINED STATE AND FEDERAL INCOME TAX
  28. 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. 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. 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. 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. 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. 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. 34. T-ACCOUNTS AFTER ADJUSTMENTS RENT EXPENSE SUPPLIES EXPENSE Dr Cr 4000 4000 4000 4000 Dr Cr 400 400 400 400
  35. 35. T-ACCOUNTS AFTER ADJUSTMENTS DEP.EXP:RENTAL EQUIPMENT Dr Cr 2500 2500 2500 2500
  36. 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. 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. 38. CLOSING ENTRIES
  39. 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. 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. 41. CLOSING ENTRIES AND THERE LEDGERS EXPENSE ACCOUNT INCOME SUMMARY 36520 36520
  42. 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. 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. 44. worksheet <ul><li>WORK SHEET ACCOUNTING.xls </li></ul>

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