1. Explain how the accounting equation organizes financial information using T-accounts and debits and credits?
2. What is a perpetual accounting system? What journal entries are involved?
3. What is the primary purpose of an accounting system?
1. On January 1, Tolson Company purchased a building by paying $85,000. The building has an estimated life of 40 years and an estimated residual value of $5,000. Prepare journal entries to record the purchase and the related year-end adjusting entry.
2. On July 1, Friler Company purchased a one year insurance policy by paying $5,400. Prepare journal entries to record the purchase and the related year end adjusting entry.
3. The current year, Vidalia company reported revenues of $250,000 and expenses of $225,000. At the beginning of the year, it's retained earnings had a balance of $95,000. During the year, Vidalia paid $11,000 dividends to shareholders. It's contributed capital was $56,000 at the beginning of the year, and it did not issue any new stock during the year. Vidalia's assets total $237,500 on December 31 of the current year. What are Vidalia's total liabilities on December 31 of the current year?