Account Titles Debit Čredit 110 Cash 400,000 120 Accounts Receivable 55,000 121 Allowance for Bad Debts 3,000 130 Notes Receivable 51,000 140 Merchandise Inventory, January 1 670,000 150 Store Supplies on Hand 3,000 170 Furniture and Fixtures 120,000 171 Accumulated Depreciation 10,000 210 Accounts Payable 40,800 220 Notes Payable 20,000 240 VAT Payable 3,800 250 Unearned Interest Income 4,000 310 Diana, Capital 1,043,400 320 Diana, Drawing 15,000 410 Sales 1,167,000 411 Sales Discounts 2,000 510 Purchases 860,000 511 Freight In 5,000 512 Purchase Returns and Allowances 3,000 520 Freight Out 3,000 530 Taxes and Licenses 12,000 540 Salaries and Wages 60,000 550 Rent Expense 14,000 560 Utilities Expense 15,000 570 Store Supplies Used 2,000 580 Depreciation Expense 4,000 600 Interest Expense 1,000 230 Interest Payable 1,000 160 Prepaid Rent 4,000 420 Interest Income 1,000 590 Bad Debts Expense 1,000 Total 2,297,000 2.297,000 he merchandise inventory at December 31, 2020 amounted to P650,000 equired: Using the solution guides provided you are required to prepare the following: 1. Income Statement in good form 2. Balance Sheet in good form 3. Closing Entries 4. Post-Closing Trial Balance
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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