Assignment Format And Submission Requirements

Assignment Task

Answer to question no-1

After adjustment journal Entries Transactions for the recording

Particulars	Debit	Credit Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Interest Expense A/c		Dr.	22520
To Interest Payable A/c				22520
(for interest accrued on the mortgage but not paid)

Supplies Expense A/c		Dr.	562.5
To Supplies A/c				562.5
(for ending supplies in hand recorded)

Insurance expense A/c		Dr.	3600
To Prepaid					3600
(for reversal of prepaid insurance)
				4500
Prepaid Insurance				4500
To Insurance Expense
(for adjustment entry passed)

Insurance			Dr.	3000
To Cash					3000
(for amount paid )


Depreciation Expense- Furniture		10000
Depreciation Expense- office Equipment	22000
Depreciation Expense- Store Equipment	16000
Depreciation Expense- Automobile		22000
To Accumulated Depreciation			70000
(for depreciation adjusted )

Cash A/c			Dr.	14075
To unearned Revenue				14075

Unearned Revenue		Dr.	14075
To Revenue					14705

Answer to question no-2

Paul services Trial Balance As At 30 June 2016
Account No	Account Name	Debit	Credit	Adjustments		Final Trial
				Debit	Credit	Debit	Credit
101	Cash at Bank	124800.00		14075	3000	135875.00
105	Accounts Receivable	41600.00				41600.00	0.00
115	Supplies	2250.00			562.5	1687.50
120	Prepaid Insurance	4500.00			3600	900.00
135	Office Furniture	56300.00				56300.00	0.00
137	Acc. Depreciation. – Furniture	0.00		10000	0.00	10000.00
140	Office Equipment	112600.00				112600.00	0.00
141	Acc. Depreciation – Equipment	0.00		22000	0.00	22000.00
145	Store Equipment	168900.00				168900.00	0.00
146	Acc. Depreciation – Equipment	0.00		16000	0.00	16000.00
170	Automobile	225200.00				225200.00	0.00
171	Acc. Depreciation – Automobile	0.00		22000		22000.00
201	Accounts Payable		83200.00				83200.00
201	Interest Payable		124800.00		22250		147050.00
201	Unearned revenue		28150.00	14075	14075		28150.00
201	Loan Payable		11260.00				11260.00
201	Mortgage Payable		225200.00				225200.00
201	Paul’s Capital		59045.00				59045.00
201	Paul’s Drawings	225.00				225.00
201	Revenue		225000.00		14075		239075.00
201	Advertising Expense	2500.00				2500.00
201	Automobile Expense	5775.00				5775.00
201	Depreciation Expense – Furniture	0.00		10000		10000.00
201	Depreciation Expense – Equipment	0.00		22000		22000.00
201	Depreciation Expense – Store Equipment	0.00		16000		16000.00
201	Depreciation Expense – Automobile	0.00		22000		22000.00
201	Insurance Expense	2100.00		6600		8700.00
201	Maintenance Expense	8750.00				8750.00
201	Miscellaneous Expense	1155.00				1155.00
201	Rent Expense	0.00				0.00
201	Supplies Expense	0.00		562.5		562.50
201	Utilities Expense	0.00				0.00
201	Interest Expense	0.00		22250		22250.00
		756655.00	756655.00	127562.50	127562.50	862980.00	862980.00

Office Equipment after Depreciation
Office Equipment		112600
Residual value		2600
Estimated useful life		5
Depreciation		22000
Closing Value		90600

Automobile after Depreciation
Office Furniture		225200
Residual value		5200
Estimated useful life		10
Depreciation		22000
Closing Value		203200

Office Furniture after Depreciation
Office Furniture	56300
Residual value	6300
Estimated useful life	5
Depreciation	10000
Closing Value	46300

Store Equipment after Depreciation
Store Equipment	168900
Residual value	8900
Estimated useful life	10
Depreciation	16000
Closing Value	152900

Answer to Answer to question no-3

Income Statement
Particulars	Amount
Revenue	239075.00

Expenses
Advertising Expense	2500.00
Automobile Expense	5775.00
Depreciation Expense – Furniture	10000.00
Depreciation Expense – Equipment	22000.00
Depreciation Expense – Store Equipment	16000.00

Depreciation Expense – Automobile	22000.00
Insurance Expense	8700.00
Maintenance Expense	8750.00
Miscellaneous Expense	1155.00
Rent Expense	0.00
Supplies Expense	562.50
Utilities Expense	0.00
Interest Expense	22250.00

Profit/ loss	119382.50

Answer to question no-4

	Journalise the Closing Entries
Date	Particulars	Debit	Credit
	Profit and Loss A/c		Dr.	119382.50
	To General expenses			119382.50
	(for all the expenses transferred)

Answer to question no-5

Balance Sheet As on 30^th June 2016
Particulars		Amount
Paul’s Capital		59045.00
Paul’s Drawings		225.00
Add: Net Profits		119382.50
Total Capital		178202.50

Interest Payable		147050.00
Unearned revenue		28150.00
Loan Payable		11260.00
Accounts Payable		83200.00
Mortgage Payable		225200.00


Total		673062.50

Cash at Bank		135875.00
Accounts Receivable		41600.00
Supplies		1687.50
Prepaid Insurance		900.00
Office Furniture	56300.00
Office Equipment	112600.00
Store Equipment	168900.00
Automobile	225200.00
Less: accumulated Depreciation	70000.00	493000.00


Total		673062.50

Answer to question no-6 Trial balance

Trial balance is the book keeping method which is used to record the business transaction in the books (Kristandl, and Quinn, 2018).

It lists the balance recorded in the general ledger accounts.

It is the amount of debit natures which are listed in the debit column and amount of credit natures which are listed in the credit balance heading.

The amount given in both columns should be equal to each other otherwise there will be material issue in the recording framework of organization (Kristandl, and Quinn, 2018).

The main purpose of preparing the trial balance is to discover the mathematical errors in the accounting recording system.

There are several errors which needs be solved by the bookkeepers and accounting software’s which reflects the redundant nature of the recording process.

The suspense account is ideally opened when there is no material recording issues in the books of account of company (Van Minh, 2017)..

Reason for Creation

The main reason of creating the trial balance is to find out the possible transposition errors and mistakes in the recording of the truncations. It is analyzed that due to hassle and other issues, some figures are recorded wrongly. The trial balances are useful for detecting the errors and person responsible for creation of variance and mistakes.

The trial balances are used by managerial persons, accountant and employees to prepare the journal entries and books of accounts. The trial balance are used to record the busienss transaction in the financial books and used as foundation for the books.

In order to prepare the trial balance, deep analysis and recording procedure is followed. The errors in the double entry system and recording process of the business transactions are found by detecting the trial balance (Warren, and Jones,., 2018).

There is adjustment journal entry which is followed by dividing the overall income balance in the books of accounts. These journal entries are used to adjust the possible errors in revenue and expenses. Adjustment journal entry is the best method to know the money changed when the entries were recorded in the books and covert the real time accounting entries into the books of accounts. It is done by following the accrual accounting system.

The trial balance and adjustment entry is prepared to cross check all the accounts details and mitigate the material issues in the books of account of company (Gregory Hayden, 2018).

Assessment Submission

The adjustment entry is required to look at the economic changes of the firm so that accounting cycle is managed.
Reason for recording

With the ramified changes in the recording system of the company, it is important to record the adjustment journal entries to identify the monthly revenue in the accounts. It assists in preparing the budget and identifies the possible errors in the books of account (Weygandt, Kimmel, and Kieso, 2015).

It assists in identifying the invoices, wages and salary that could be used to debit and credit amount accordingly. It includes the balance sheet account and income statements for recording the data. Therefore, these journal entries assists in deciding the formulated plans that business could use to gain profit. The adjustment entries are ideally used at the every last date of the accounting period that could be either monthly or annually (Giles, 2014).

The report prepared in the books of account reflects the revenue earned and knows the expenses that have incurred in the accounting period in which recording of the statement and busienss transactions have been done (Van Minh, 2017).

Purpose of writing an adjusted trial balance

The main purpose of writing the adjusted trial balance is to evaluate the possible errors and mistakes in the books of account. It is used to identify the errors where account titles and balance are appeared in the general ledger and adjustment is made by passing the adjustment entries in the books of accounts of company. It is used as one of the internal documents as supporting data for preparing the financial statement of company. The ultimate objective of preparing the trial balance by using the adjustment entries is to conclude the factors where there is zero variance among the debit side and credit side of the recorded general ledger books of Company.

The adjusted trial balances are recorded by the end of the accounting cycle (Arora, 2016). It is considered that by preparing the adjusted trial balance will be added in the developing the financial statement for the duration and preparing the adjusted trial balance for the year. There are several reasons for preparing the trial balance and the main reason is to identity the entries of the adjustments where these items are recorded correctly. The financial statements are prepared and shared with the annual report to shareholders and other stakeholders with view to make the busienss more transparent. If the wrong information is used to prepare the financial statement then the prepared financial statement will be proven definitely incorrect (Kristandl, and Quinn, 2018).

Academic Learning Support Team

Difference between the adjustment entries and closing journal entries

There are several differences between the closing entries and adjustment general entries. However, the main differences between closing entries and adjustment general entries are related to its recording process. The accounting adjustment entries are made by the end to the accounting period. These statements are used to identify the purpose of maintaining the records of financial transactions which will further be recorded in the financial statements of company. For instance, if the company has recorded the bad debts but the amount under the bad debts accounts for the few of the last days has not been recorded when accounting period ends. Then in this case, adjustment entries will be recorded which involves the amount to be paid by the firm before the amount that is transferred into the expenses accounts (Spiceland, Spiceland, and Schaeffer III, 2015).

There are several closing entries which are recoded on the last day of the accounting period and the same are used to post the records after recording of the financial statements. The most of the closing entries are used to utilise the accounting summary. Income summary reflects the holding accounts where all the income and expenses details are recorded. It is evaluated that income summary does not cover the time impact on the financial statements of company. In order to determine whether the accounts detail have any material issue or not, firstly accounts need to evaluate the recorded entry when the balance of both accounts such as revenue and expenditure are equal to zero or not (Budding, and van Schaik, 2015).

The closing entries passed will be appeared with the new balance in New Year. After that the balance of the income and expenditure account will be accumulate in the retained earnings of the equity part of the owners (Gilbertson, and Lehman, 2016).

All the closing entries that have few purpose of reporting financial are used to close the accounts. It is analyzed that journal entries are passed where all the revenue accounts are debited and income summary have been credited.

References

Arora, M.N., 2016. ACCOUNTING FOR MANAGEMENT. HIMALAYA PUBLISHING HOUSE.

Budding, T. and van Schaik, F., 2015. Public sector accounting and auditing in the Netherlands. In Public Sector Accounting and Auditing in Europe (pp. 142-155). Palgrave Macmillan, London.

Gilbertson, C.B. and Lehman, M.W., 2016. Century 21 Accounting: General Journal, Copyright Update. Cengage Learning.

Giles, R., 2014. Finance & Accounting New 4th Edition. Lulu. com.

Gregory Hayden, F., 2018, January. Using the Social Fabric Matrix to Establish Corporate Accounting Consistent with Normative Criteria Regarding Climate Change. In Forum for Social Economics (Vol. 47, No. 1, pp. 64-86). Routledge.

Kristandl, G. and Quinn, M., 2018. Internal accounting practices at Whitbread & Company, c. 1890–1925. Accounting History, 23(1-2), pp.206-230.

Spiceland, C.P., Spiceland, J.D. and Schaeffer III, S.J., 2015. Using a course redesign to address retention and performance issues in introductory accounting. Journal of Accounting Education, 33(1), pp.50-68.

Van Minh, N., 2017. Quantum gauss-Jordan elimination and simulation of accounting principles on quantum computers. International Journal of Theoretical Physics, 56(6), pp.1948-1960.

Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.

Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015. Financial & managerial accounting. John Wiley & Sons.

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