balance sheet on december 31,year 1 and december 31year 2 are presented below: assets dec 31 year 1 dec 31 year 2 liabilites dec 31 year 1 dec 31 year 2 cash 50 000 60 000 trade accounts payable 62 000 49 000 accounts receivable 95 000 89 000 interest payable 8 000 11 000 allowance for uncollectible accounts (4 000) (3 000) bonds payables 200 000 200 000 inventory 120 000 140 000 unamortized bond discount (15 000) (10 000)
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.
| assets | dec 31 year 1 | dec 31 year 2 |
liabilites
|
dec 31 year 1 |
dec 31 year 2 |
| cash | 50 000 | 60 000 | trade accounts payable | 62 000 | 49 000 |
| 95 000 | 89 000 | interest payable | 8 000 | 11 000 | |
| allowance for uncollectible accounts | (4 000) |
(3 000) |
bonds payables | 200 000 | 200 000 |
| inventory | 120 000 | 140 000 | unamortized bond discount | (15 000) | (10 000) |
| property plant and equipment | 295 000 |
340 000 |
Equity | 199 000 | 257 000 |
| accumlated |
(102 000) | (119 000) | |||
| total assets | 454 000 | 507 000 | total liabilities | 454 000 | 507 000 |
additional information for year 2 :
cash payents to suppliers of merchandise were 180 000
sales revenue was 338 000
3 000 of accounts receivables was written off
equipment was acquired for 65 000
depreciation expense was 30 000
interest expenses was 20 000
based on the above information calculate the following :
1. the cost of goods sold year 2.
2. Cash collections from customers in year 2 were
3. the carrying amount (cost minus accumilated depreciation) of property disposes of in year 2 .
4. cash intersest payments in year 2 .
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
