Computers Ltd Laguna Office warehouse 13,800 Two personal computers received in December 3,900 Office supplies purchased in November Manufacturing royalties for October through December, 22,100 P12,100; and royalty advance on January through March London Laboratories royalties, P10,000 Robotics equipment invoiced by Vision in December but not received and placed in service until January 2021 Contract services for November and December, P9,670; and prepayment for January 2021 services, P5,000 Employment fee for marketing vice president hired in October Vision Equipment 363,000 XYZ Custodial Services 14,670 Headhunters Agency 6,770 Required: Prepare all necessary audit adjustments based on your analysis of the above data.
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.
![You are a member of the audit team of BSA and Co. examining the accounts of TOK Manufacturing for the year
ended December 31, 2020. BSA has audited TOK for the past 5 years.
You have been assigned the task of searching for unrecorded liabilities. You have determined that all payroll
taxes, income and property taxes, sales taxes, and interest have been properly reflected by TOK. In addition, you
have obtained the following copy of TOK's 12/31/20 adjusting journal entry to reflect other unrecorded
liabilities at year-end:
Raw materials inventory
Utilities expense
23,675
6.400
Professional fees
33,690
Manufacturing supplies
Accounts payable
To record the following invoices unpaid at 12/31/20:
Fox Manufacturing
8,900
72,665
P23,675
2,760
Consolidated Gas
Meralco
Andersen (consulting)
Luzmin Suppliers
Deli Products
3,640
33,690
7,700
1,200
Although the Luzmin Suppliers invoice was received in December, the supplies were shipped to TOK on January 2
and received on January 4.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0ed32c3-613a-45fe-87f5-68222252fca1%2F3d522eeb-be23-4f33-b526-d9662bc1a685%2F2fcy95v_processed.jpeg&w=3840&q=75)
![In addition to a copy of this journal entry and the supporting documentation, you requested all invoices
vouchered during the period 1/2/21 to 1/21/21 and all unvouchered invoices as of 1/21/21. In examining these
invoices and vouchers, you found the following:
Gemma
Raw materials shipped FOB shipping point on 12/30 and
received by TOK on 1/2/21
P17,200
Industries
Cayetano & Cruz
64,000 2020 legal services
Manufacturing supplies shipped FOB destination on 12/30
2,355
and received by TOK on 1/2/21
1,200 December water bill
132,000 Five lift trucks received and placed in service December 12
Luzmin Suppliers
MWSS
Lopez Manufacturers
Payment for judgment rendered 1/4/21, applicable to a
Manila City Court
27,500 product liability lawsuit brought against TOK in February
2020
Computers Ltd
Laguna Office warehouse
13,800 Two personal computers received in December
3,900 Office supplies purchased in November
Manufacturing royalties for October through December,
22,100 P12,100; and royalty advance on January through March
London Laboratories
royalties, P10,000
Robotics equipment invoiced by Vision in December but not
received and placed in service until January 2021
Vision Equipment
363,000
Contract services for November and December, P9,670; and
XYZ Custodial Services
14,670
prepayment for January 2021 services, P5,000
Employment fee for marketing vice president hired in
October
Headhunters Agency
6,770
Required: Prepare all necessary audit adjustments based on your analysis of the above data.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0ed32c3-613a-45fe-87f5-68222252fca1%2F3d522eeb-be23-4f33-b526-d9662bc1a685%2Fu11rtbg_processed.jpeg&w=3840&q=75)
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