Assignment No. 1 Question On December 1, 2017, Rod Company had the following account balances. Debit $ 7,200 Accounts Payable Owner's Capital Credit 7,000 40,000 Cash Accounts Receivable 5,800 Inventory 12,000 22,000 $47,000 Land $47,000 During December, the company completed the following summary transactions. Dec 8 Received $3,000 cash from customers in payment of account (no discount allowed). Dec 10 Sold merchandise for cash $7,000, FOB shipping point. The appropriate party paid freight charges $800. Dec 13 Purchased merchandise on account from Boehm Co. $10,000, terms 1.5/10, n/30, FOB Shipping point. Dec 14 Paid freight cost on purchased merchandise $300. Dec 15 Paid rent $1,800. Dec 16 Received credit from Bochm Co. for merchandise returned $200 Dec 17 Purchased merchandise on account from Horn Co. $6,600, terms 3/10, n/30, FOB Destination. Dec 18 Sold merchandise on account $14,000 to ABC Co., terms 4/15, n/30, FOB destination. Dec 19 Paid freight cost on sold merchandise $400. Dec 20 Paid salaries and wages $3,200. Dec 21 Paid Bochm Co. in full. Dec 21 Granted an allowance to ABC Co. for defective merchandise $500. Dec 27 Received collections in full ABC Co. Instructions (a) Journalize the December transactions using a periodic inventory system. (b) Enter the December 1 balances in the standard form of accounts and post the December transactions. (c) Prepare trial balance. (d) Prepare an income statement at December 31. Ending inventory on this date is $11,000 (e) Journalize and post the closing entries. Also prepare post-closing trail 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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