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Accounting 1

Content type
User Generated
Subject
Accounting
Type
Homework
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Surname 1
Name
Supervisor
Course
Date
Date
Title of account
Debit
Credit
July. 31, 2014
Tax expense(22,500/12)
1,875
Tax payable
1,875
(Estimation based upon the prior year billing)
Date
Title of account
Debit
Credit
Oct. 31, 2014
Tax payable (1,875*3)
5,625
Prepaid property tax
17,213
Cash
22,838
(Tax payment)
Date
Title of account
Debit
Credit
Oct. 31, 2014
Tax expense (17/213/9)
1,913
Prepaid property tax
1,913
(Adjusting entry)
Current liabilities
Typically, a current liability is an organizational obligation which mature within the
operating cycle of a firm or one year and includes short-term debts, accrued interests, accounts

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Surname 2
payables, sales taxes and income taxes payables, and other debt obligations (Marshall). Accounts
payables are as a result of acquisitions of services or goods from trade creditors whilst interest
payable result from accruals. Non-current liabilities are expected to be met a year from the date
of reporting. For a commitment to be recorded as a liability, it ought not to be payable in cash.
The business organization may be needed to provide or transfer other services or assets.
Current debts that have a contractual amount include; dividends, notes payable, unearned
instruments as well as accrued items, and accounts payable. Current liabilities that depend in
business operations include; income taxes, payroll taxes, and bonuses. A current liability in
which amount must be approximated include warranties, property taxes, coupons as well as other
contingencies.
Valuation of Current Liabilities
Current liabilities encompasses debt obligation that must be met during one operating
cycle or a year. Firms are generally required to evaluate the worth of these debts at the PV value
of the cash flows expected to settle them in future. As such, current fiscal burdens are stated at
their PV at time of maturity in full on the financial statements.

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Surname 1 Name Supervisor Course Date Date July. 31, 2014 Title of account Tax expense(22,500/12) Tax payable (Estimation based upon the prior year billing) Date Oct. 31, 2014 Title of account Tax payable (1,875*3) Prepaid property tax Cash Debit Credit 1,875 1,875 Debit Credit 5,625 17,213 22,838 (Tax payment) Date Oct. 31, 2014 Title of account Tax expense (17/213/9) Prepaid property tax Debit Credit 1,913 1,913 (Adjusting entry) Current liabilities Typically, a current liability is an organizational obligation which mature within the operating cycle of a firm or one year and includes short-term debts, accrued interests, accounts Surname 2 payables, sales taxes and income taxes payables, and other debt obligations (Marshall). Accounts payables are as a result of acquisitions of services or goods from trade creditors whilst interest payable result from accruals. Non-curr ...
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