Don Store Pty Ltd is owned and managed by Lucy Hake in the inner South Africa. The following adjusted Trial Balance for Don Store Pty Ltd has been prepared at the year end by Lucy. Don Store PTY LTD TRIAL BALANCE AS AT 30 JUNE 2020 Account Debit ($) Credit ($) Cash 35 400 Accounts receivable 50 000 Inventory (1 July 2019) 105 800 Prepaid Rent 7 100 Term Deposit 126 000 Store Equipment 80 000 Accumulated Dep’n – Store Equipment 20 000 Delivery Truck 60 000 Accumulated Depreciation – Delivery Truck 12 000 Accounts Payable 56 800 Unearned Revenue 8 500 Bank loan 40 000 Saphira Browne, Capital (1 July 2019) 320 660 Saphira Browne, Drawings 12 500 Sales Revenue 440 000 Sales Returns and Allowances 15 800 Purchase Returns and Allowances 5 900 Discounts Received 8 200 Purchases 245 720 Freight Inwards 22 870 Freight Outwards 7 500 Wages Expense 86 180 Delivery Truck Maintenance Expense 12 450 Discount Allowed 1 340 Store Rent Expense 25 700 Advertising Expense 9 000 Accrued Delivery Truck Maintenance Expense 2 400 Doubtful Debts Expense 1 000 Allowance for Doubtful Debts 1 000 Depreciation expense – Store Equipment 10 000 Depreciation Expense – Delivery Truck 6 000 Accrued Accounting Wages 4 900 920 360 920 360 Additional Information: A stocktake performed at 30 June 2020 recorded an ending inventory balance of $145 600. The wages account balance is comprised of $70 200 for Selling and Distribution and $15 980 for Administration. REQUIRED: Prepare a fully classified Income Statement for the year ending 30 June 2020.
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.
Don Store Pty Ltd is owned and managed by Lucy Hake in the inner South Africa. The following adjusted
Don Store PTY LTD
TRIAL BALANCE
AS AT 30 JUNE 2020
|
Account |
Debit ($) |
Credit ($) |
|
Cash |
35 400 |
|
|
|
50 000 |
|
|
Inventory (1 July 2019) |
105 800 |
|
|
Prepaid Rent |
7 100 |
|
|
Term Deposit |
126 000 |
|
|
Store Equipment |
80 000 |
|
|
Accumulated Dep’n – Store Equipment |
|
20 000 |
|
Delivery Truck |
60 000 |
|
|
|
|
12 000 |
|
Accounts Payable |
|
56 800 |
|
Unearned Revenue |
|
8 500 |
|
Bank loan |
|
40 000 |
|
Saphira Browne, Capital (1 July 2019) |
|
320 660 |
|
Saphira Browne, Drawings |
12 500 |
|
|
Sales Revenue |
|
440 000 |
|
Sales Returns and Allowances |
15 800 |
|
|
Purchase Returns and Allowances |
|
5 900 |
|
Discounts Received |
|
8 200 |
|
Purchases |
245 720 |
|
|
Freight Inwards |
22 870 |
|
|
Freight Outwards |
7 500 |
|
|
Wages Expense |
86 180 |
|
|
Delivery Truck Maintenance Expense |
12 450 |
|
|
Discount Allowed |
1 340 |
|
|
Store Rent Expense |
25 700 |
|
|
Advertising Expense |
9 000 |
|
|
Accrued Delivery Truck Maintenance Expense |
|
2 400 |
|
Doubtful Debts Expense |
1 000 |
|
|
Allowance for Doubtful Debts |
|
1 000 |
|
Depreciation expense – Store Equipment |
10 000 |
|
|
Depreciation Expense – Delivery Truck |
6 000 |
|
|
Accrued Accounting Wages |
|
4 900 |
|
|
|
|
|
|
920 360 |
920 360 |
|
|
|
|
Additional Information:
- A stocktake performed at 30 June 2020 recorded an ending inventory balance of $145 600.
- The wages account balance is comprised of $70 200 for Selling and Distribution and $15 980 for Administration.
REQUIRED:
Prepare a fully classified Income Statement for the year ending 30 June 2020.
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