4. A Ltd. was registered with an Authorized capital of Rs. 6, 00,000 in equity shares of Rs. 10 each. The following is its Trial Balance on 31 December 2018. Goodwill 25,000 Cash 750 39,900 1,85,000 5,000 Bank Purchases Preliminary Expenses Share Capital 12% Debentures 4,00,000 3,00,000 P &L account (Cr) 26,250 Calls-in-arrears 500,ר 3,00,000 3,30,000 39,250 Premises Plant and Machinery Interim Dividend Sales 4,15,000 Stock 1.1.2018 75,000 Furniture and Fixture 7,200 Sundry Debtors Wages General Expenses Freight & Carriage 87,000 84,865 6,835 13,115 14,500 5,725 2,110 18,000 Salaries Director Fee Bad debts Debenture Interest Paid Bill Payable Sundry Creditors General Reserve 37,000 40,000 25,000 Provision for bad debts 3,500 12,46,750 12,46,750 Prepare Profit & Loss Account, Profit & Loss Appropriation A/c and Balance Sheet in proper form afte making the following adjustments: 1. Depreciate plant and machinery by 15% 2. Write off Rs.500 from preliminary expenses 3. Provide for 6 months interest on debentures 4. Leave bad and doubtful debts provision at 5% on sundry debtors 5. Provide for income tax at 50% 6. Stock on 31.12.2018 was Rs. 95,000
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.
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