At December 31, 2016, the Accounts Receivable balance of TM Manufacturer is $230,000. The Allowance for Bad Debts acCcount has a $24,000 debit balance. TM Manufacturer prepares the following aging schedule for its accounts receivable: Age of Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Accounts Receivable $ 75,000 $ 80,000 $ 35,000 $ 40,000 Estimated percent uncollectible 0.8% 4.0% 6.0% 48.0% Requirements oode sold and 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2016. 2. Show how TM Manufacturer will report its net accounts receivable on its December 31, 2016, balance sheet. Assume that Toyland store bought and sold a line of dolls during December as follows: Dec. 1 Beginning merchandise inventory 11 units @ $ 8 each 8. Sale 6 units @ $ 21 each 14 Purchase 17 units @ $ 15 each 21 Sale 15 units @ $21 each Requirements 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? COS 4. Which method results in a higher cost of ending merchandise inventory?
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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