Financial Accounting I-CTRL 101 Lecture 7 PDF

Dr. Hala Amin Financial Accounting I-CTRL 101 Financial Accounting I Winter 2024-Lecture “7” 1 Dr. Hala Amin Financial Accounting I-CTRL 101 Adjusting Accounts for Financia...

Dr. Hala Amin Financial Accounting I-CTRL 101 Financial Accounting I Winter 2024-Lecture “7” 1 Dr. Hala Amin Financial Accounting I-CTRL 101 Adjusting Accounts for Financial Statements Chapter 3 Wild, Shaw, and Chiappetta Fundamental Accounting Principles 23rd Edition 2 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the 9. Post transactions Closing Trial Balance 3. Post to ledger accounts 8. Closing 4. Prepare a entries trial balance 7. Prepare 5. Journalize financial and post statements adjusting 6. Prepare 3 adjusted trial entries balance Dr. Hala Amin Financial Accounting I-CTRL 101 Analyzing, journalizing, Posting, adjusting and presenting Financial Information QUAKE COMPREHENSIVE CASE 4 Dr. Hala Amin Financial Accounting I-CTRL 101 5 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the transactions 6 Dr. Hala Amin 2. Journalize the Financial Accounting I-CTRL 101 transactions Date Transaction Dr. Cr. April Cash 100,000 1st Equipment 50,000 Land 200,000 350,000 Ray Quake Capital April Cash 3,450 2nd Unearned Service Revenue 3,450 April Prepaid Insurance 2,700 30th Cash 2,700 May Cash 7,500 1st Service Revenue Earned 7,500 May Supplies 1,400 10th Accounts Payable 1,400 May Ray Quake Withdrawal 5,000 20th Cash 5,000 May Accounts Payable 1,400 25th Cash 1,400 May Supplies 100 26th Cash 100 7 June Accounts Receivable 7,000 1st Service Revenue Earned 7,000 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the transactions 3. Post to ledger accounts 8 Dr. Hala Amin Financial Accounting I-CTRL 101 3. Post to ledger accounts 9 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 10 Dr. Hala Amin Financial Accounting I-CTRL 101 4. Prepare a trial balance 11 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 5. Journalize and post adjusting 12 entries Dr. Hala Amin Financial Accounting I-CTRL 101 5. Journalize and post adjusting entries Date Transaction Dr. Cr. June 30th Unearned Service Revenue 3,450 Service Revenue Earned 3,450 June 30th Insurance Expense 450 Prepaid Insurance 450 June. Supplies Expense 750 30th Supplies 750 June 30th Depreciation Expense 2,500 Accumulated Depreciation 2,500 June 30th Cash 3,500 Accounts Receivable 3,500 13 June 30th Utilities Expense 150 Utilities Payable 150  Service Revenue Earned (401) Service Revenue Unearned (208) Dr. Cr. Dr. Cr. 7,500 3,450 3,450 7,000 Bal, 3,450 Bal. 14,500 New balance 0 + 3,450 New Bal. Prepaid Insurance (128) $17,950 Dr. Cr. Insurance Expense 2,700 450 Dr. Cr. Bal. $2,700 0 New bal. $ 2,250 +450 New balance Supplies (130) $450 Dr. Cr. Supplies Expense 1,400 750 Dr. Cr. 100 Bal. $1,500 0 New bal. $750 750 New balance Accumulated Depreciation (152) $750 Dr. Cr. 0 Depreciation Expense 2,500 Dr. Cr. New bal.$2,500 Cash (101) Dr. Cr. 0 100,000 2,700 2,500 Accounts Receivable (102) 3,450 5,000 New bal. $2,500 Dr. Cr. 7,500 1,400 7,000 3,500 110,950 100 Utilities Expense Bal. $7,000 9,200 Dr. Cr. New Bal. $3,500 Bal. $101,750 0 14 + 3,500 150 Utilities Payable New Bal. 105,250 New bal. $150 Dr. Cr. 0 150  Ray Capital Ray Withdrawal Dr. Cr. Dr. Cr. 350,000 5,000 Bal. 350,000 Bal. 5,000 Equipment (140) Dr. Cr. Accounts Payable (201) 50,000 Dr. Cr. Bal $50,000 1,400 1,400 Land (150) Bal. 0 Dr. Cr. 200,000 Bal $200,000 15 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyze transactions 2. Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 5. Journalize and post 6. Prepare adjusting 16 adjusted trial entries balance 105,250 $3,500 $ 2,250 $750 $50,000 $2,500 $200,000 $0 $150 $0 $350,000 $5,000 $17,950 $450 $750 $2,500 $150 $370,600 $370,600 17 Dr. Hala Amin Financial Accounting I-CTRL 101 Full Accounting Cycle 1. Analyse transactions 2. Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 7. Prepare 5. Journalize financial and post statements adjusting 6. Prepare 18 adjusted trial entries balance Dr. Hala Amin Financial Accounting I-CTRL 101 7. Prepare financial statements The income statement describes a company’s revenues and expenses along with the resulting net income or loss over a period of time due to earnings activities. Quake Co. Income Statement For the Period Ended June 30th , 2016 Revenues: Service Revenue Earned 17,950 (-) Expenses Insurance Expense 450 Supplies Expense 750 Depreciation Expense 2,500 Utilities Expense 150 19 Total Expenses (3,850) Net Income (Loss) 14,100 Dr. Hala Amin Financial Accounting I-CTRL 101 7. Prepare financial statements The Statement of Owners’ Equity explains changes in equity from net income (or loss) and from any owner investments and withdrawals over a period of time. Quake Co. Statement of Owner’s Equity For the Period Ended June 30th , 2016 Ray Capital April 1st, (i.e Beginning) 0 Plus: Investments by the owner 350,000 Net Income (loss) 14,100 Minus: 364,100 Withdrawals by the Owner (5,000) 20 Ray Capital, June 30th (i.e Ending) 359,100 Dr. Hala Amin Financial Accounting I-CTRL 7. Prepare 101 financial statements The Balance Sheet describes a company’s financial position at a point in time. Quake Co. Balance Sheet On June 30th , 2016 Assets Liabilities &Owners’ Equity Cash 105,250 Utilities Payable 150 Accounts Receivable 3,500 Supplies 750 Total Liabilities 150 (a) Prepaid Insurance 2,250 Equipment 50,000 R. Capital 359,100 (b) Less: Acc. Dep. (2,500) Net Equipment 47,500 Land 200,000 21 Total Assets 359,250 Total Liabilities &OE 359,250(a+b) Dr. Hala Amin Financial Accounting I-CTRL 101 Done with Lecture (7)  Covered today : Accounting Cycle (7 steps ) Comprehensive Exercise 22