Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year after all adjustments, including those for inventories, were recorded and posted: $36,907,500 40,774,000 22,144,500 23,550,500 6,327,000 5,624,000 3,690,800 3,620,500 935,000 447,000 228,800 3,515,000 Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense Accounts Receivable Collection Expense Warehouse Expense The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $439,000; Summer Sports Division, $496,000. b. Transportation expense-allocated to divisions at a rate of $15 per bill of lading: Winter Sports Division, 14,200 bills of lading; Summer Sports Division, 15,600 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $8 per invoice: Winter Sports Division, 13,200 sales invoices; Summer Sports Division, 15,400 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 170,000 square feet; Summer Sports Division, 210,000 square feet.
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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