Create a General Ledger for Wally's Company
What are the key transactions for Wally's company?
1. $200,000 deposit by Wally
2. $50,000 purchase of supplies on account
3. $5,000 rent payment in cash
4. $10,000 sale of Widgets to Sal's Supplies
5. $800 salary payment to employee Pat Pickel
Key Transactions for Wally's Company
To create a General Ledger for Wally's company, we need to record the following key transactions:
1. Wally deposited $200,000 of his own money into the company.
2. Wally purchased supplies on account for $50,000.
3. Wally paid rent in cash on his building - $5,000.
4. Wally sold $10,000 worth of Widgets for $10,000 on account to Sal's Supplies.
5. Wally paid his employee Pat Pickel $800 for one week's salary.
A General Ledger is a crucial tool in accounting that records all financial transactions of a business. It provides a complete record of all the company's financial activities and helps in preparing financial statements.
For Wally's company, we would create a General Ledger with separate accounts for Cash, Supplies, Rent Expense, Accounts Receivable, Sales, and Salaries Expense to track the key transactions mentioned above.
Each transaction will be recorded in the respective accounts with the corresponding debits and credits. The General Ledger will help in ensuring that all transactions are accurately recorded and classified into appropriate categories.
By organizing the transactions in the General Ledger, Wally's company can easily monitor its financial performance, analyze trends, and make informed business decisions based on the financial data recorded.
Overall, the General Ledger serves as the central repository for all financial information, providing a clear overview of the company's financial position and performance.