Consider the following events for Carla Vista's Innovations Co. that occurred during 2024. For each event, indicate the amount of expense that should be recognized in the 2024 income statement. (Hint: Use professional judgement to estimate expense where appropriate.) (Do not leave any answer field blank. Enter O for amounts.) 1. Leased factory space from Whole Properties Company for a one-year period starting November 1, 2024. Six months of rent at $2,430 per month was paid in advance. 2. 3. Incurred $28,700 of research costs for new products. No new products were developed but management believes the research will lead to new products. Used power and water during December for manufacturing. Carla Vista's will receive the bill in January 2025 and pay it in February 2025. Power and water costs totalling $45,100 have been recorded for the period from January 1 to November 30, 2024. New packaging equipment costing $38,880 was installed during November 2024. The equipment was tested in December and will be used for packaging starting in January 2025. The equipment has an estimated useful life of 4 years and an estimated residual value of $3,240. The company uses straight-line depreciation. $ $
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.
Aa 65.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
