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ACCG100 Lecture Notes - Lecture 6: General Ledger, Retained Earnings, Sole Proprietorship

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copperfly610
15 Aug 2018
School
Macquarie University
Department
Accounting and Corporate Governance
Course
ACCG100
Professor
Colly He

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Document Summary

Once adjusting entries have been made, adjustments are posted to the individual general ledger accounts. The general ledger balances are then posted to the adjusted trial balance, which reflects all posted end-of-period adjusting entries. Temporary accounts relate to only a given accounting period i. e. revenues, expenses, drawings/dividends. Must be closed to set the account balance to zero balance at the end of each accounting period. Permanent (real) accounts are carried forward to future accounting periods. Journal entries that close all temporary accounts to the permanent equity account (capital) and the end of the accounting period. A special temporary account, profit or (and) loss summary account, is created to facilitate the closing process. Income and expense accounts then begin the next accounting period with a zero balance. Close all income accounts ( zero balance) to the p & l summary account.

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Related Questions

In one (1) page or less, choose 5 financial accounting topicsthat we’ve covered this semester and relate them to yourpersonal life or the real world(outside of accounting, or course). I have provided a listbelow to give you some ideas, but please feel free to think outsidethe box.

Income Statement

Balance Sheet

Statement of Cash Flows

Bank Reconciliation

Liabilities

Bonds

Notes

Assets

Equity

Chart of Accounts

Debits and Credits

Lower of Cost or Market

Bookkeeping

Payroll

Taxes

Inventory and Cost of Goods Sold

Depreciation

Accumulated Depreciation

Adjusting Entries

Journal Entries

General Ledger

Closing Entries

Receivables

Bad Debt Expense

Interest

Prepaid Expenses

Unearned Revenue

Sales

Sales Returns and Allowances

Sales Discounts

Inventory Valuation

FIFO – First in, First out

LIFO – Last in , First out

Specific Identification

Weighted Average

Sole Proprietorship

Corporation

Conservatism

Creditors

Equipment

T-Accounts

Net Income

Trial Balance

Temporary Accounts

Permanent Accounts

Audit report

Ratios

Debt-to-assets

Asset Turnover

Net Profit Margin

Sarbanes-Oxley Act

IFRS

Segregation of duties

Unqualified Opinion

The general ledger of the Karlin Company, aconsulting company, at January 1, 2013, contained the following account balances:

Account Title

Debits

Credits

Cash

30,000

Accounts receivable

15,000

Equipment

20,000

Accumulated depreciation

6,000

Salaries payable

9,000

Common stock

40,500

Retained earnings

9,500

Total

65,000

65,000


The following is a summary of the transactions for theyear:

a.

Sales of services, $100,000, of which $30,000was on credit.

b.

Collected on accounts receivable, $27,300.

c.

Issued shares of common stock in exchange for$10,000 in cash.

d.

Paid salaries, $50,000 (of which $9,000 wasfor salaries payable).

e.

Paid miscellaneous expenses, $24,000.

f.

Purchased equipment for $15,000 in cash.

g.

Paid $2,500 in cash dividends to shareholders.

1.

Accrued salaries at year-end amounted to$1,000.

2.

Depreciation for the year on the equipment is$2,000.

Required:

1.

Prepare a general journal entry for each ofthe summary transactions listed above.

2.

Prepare the adjusting journal entries.


3.

Prepare the closing entries.




4.

Post the opening balances, transactions,adjusting and closing entries into the appropriatet-accounts.

5.

Prepare an unadjusted trial balance.


6.

Prepare an adjusted trial balance.

7.

Prepare an income statement for 2013.


8.

Prepare a balance sheet as of December 31,2013.


9.

Prepare a post-closing trial balance.

The general ledger of the Karlin Company, a consulting company, at January 1, 2018, contained the following account balances: Account Title Debits Credits Cash 33,500 Accounts receivable 10,000 Equipment 15,000 Accumulated depreciation 4,500 Salaries payable 6,000 Common stock 41,000 Retained earnings 7,000 Total 58,500 58,500 The following is a summary of the transactions for the year: Sales of services, $102,000, of which $30,600 was on credit. Collected on accounts receivable, $22,000. Issued shares of common stock in exchange for $7,500 in cash. Paid salaries, $37,000 (of which $6,000 was for salaries payable). Paid miscellaneous expenses, $20,000. Purchased equipment for $10,000 in cash. Paid $2,425 in cash dividends to shareholders. Accrued salaries at year-end amounted to $740. Depreciation for the year on the equipment is $1,500. Required: 2., 5, & 8. Prepare the summary, adjusting and closing entries for each of the transactions listed. 3. Post the transactions, adjusting and closing entries into the appropriate t-accounts. 4. Prepare an unadjusted trial balance. 6. Prepare an adjusted trial balance. 7-a. Prepare an income statement for 2018. 7-b. Prepare a balance sheet as of December 31, 2018. 9. Prepare a post-closing trial balance.