2012 2013 2014 $385,000 320,000 $426,000 275,000 Sales on account $525,000 Installment sales 380,000 Collections on installment sales Made in 2012 Made in 2013 90,000 110,000 100,000 40,000 140,000 125,000 Made in 2014 Cost of sales Sold on account 270,000 214,400 77,000 50,000 277,000 176,000 87,000 51,000 341,000 228,000 92,000 Sold on installment Selling expenses Administrative expenses 52,000
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Chantal Stores sells merchandise on open account as well
as on installment terms.
From the data above, which cover the 3 years since Chantal Stores commenced operations, determine the net income for 2014, applying the installment-sales method of accounting. (Ignore interest charges.)
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