AB Ltd. presents the following selected accounts, all balances are after adjusting journal entries. All accounts have normal balance (accounts which are normally debits have debit balances here and visa-versa). Prepare a multi-step income statement. Advertising Expense Advetising Payable Interest Expense Interest Payable Inventory at beginning of the period Inventory at the end of the period Equipment - Accumulated Depreciation Equipment - Depreciation Expense Purchases Purchases Discounts Purchases Returns and Allowance Salary and Wages Expense Salary and Wages Payable Sales Sales Discounts Sales Returns and Allowances 1,300 1,520 350 1,050 15,100 10,200 800 100 6,135 550 70 7,100 530 28,726 880 1,230 400 300 6,135 Transportation In Transportation Out Utilities Expense Required 1: AB's Net Sales for the period must have been: $ Required 2: AB's Cost of Goods Available for Sale for the period must have been: $ Required 3: AB's Cost of Goods Sold for the period must have been: $ Required 4: AB's Gross Profit on Sales in dollars for the period must have been: $ Required 5: AB's total Operating Expenses (not including COGS) for the period must have been: $ Required 6: AB's Net Income (loss) in dollars for the period must have been: $
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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