ennifer James is a sole trader who operates as Jenny Construction Supplies, a construction supplies firm offering construction material. She maintains the firm’s accounting records on Quick Books. Below is the Trial Balance of her business extracted for year ended 30 September 2018. Trial Balance as at 30 September 2021 Dr Cr $ $ Equity 2,300,000 Sales 4,281,923 Purchases 1,893,612 Carriage Outwards 43,000 Drawings 15,000 Rent & Rates 96,000 Stationery 25,962 Advertising 100,000 Salaries & Wages 325,711 Returns 5,296 3,481 Bad Debts 33,250 Rent Receivables 100,000 Provision for Depreciation -Building 390,000 -Motor Vehicle 160,000 -Equipment 450,000 Carriage Inwards 56,009 Bank 25,000 Inventory, 1 October 2017 120,000 Equipment – at cost 1,500,000 Building – at cost 2,600,000 Motor Vehicle – at cost 800,000 Land 1,500,000 Commission Receivable 6,200 Discounts 12,693 32,158 Trade receivables 298,730 Trade payables 226,501 Cash 50,000 Long Term Loan 1,500,000 9,475,263 9,475,263 The following additional information as at 30 September 2018 is available: a) Rent is owing, $15,000. b) Rates has been prepaid by $6,000 c) Provision for doubtful debt is to be set up at a rate of 10% on debtors. d) Depreciation rates are as follows: Equipment - 10 %, using the straight line method Building - 5%, using the straight line method Motor vehicle - 20%, using the reducing balance method e) Inventory at the close of business was valued at $131,000. f) Advertising is prepaid by $20,000 g) Ms. James took $30,000 of goods for personal use and this was not recorded in the books. what is the Net sales for the year was:
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.
ennifer James is a sole trader who operates as Jenny Construction Supplies, a construction supplies firm offering construction material. She maintains the firm’s accounting records on Quick Books. Below is the
Trial Balance as at 30 September 2021
Dr
Cr
$
$
Equity
2,300,000
Sales
4,281,923
Purchases
1,893,612
Carriage Outwards
43,000
Drawings
15,000
Rent & Rates
96,000
Stationery
25,962
Advertising
100,000
Salaries & Wages
325,711
Returns
5,296
3,481
33,250
Rent Receivables
100,000
Provision for
-Building
390,000
-Motor Vehicle
160,000
-Equipment
450,000
Carriage Inwards
56,009
Bank
25,000
Inventory, 1 October 2017
120,000
Equipment – at cost
1,500,000
Building – at cost
2,600,000
Motor Vehicle – at cost
800,000
Land
1,500,000
Commission Receivable
6,200
Discounts
12,693
32,158
Trade receivables
298,730
Trade payables
226,501
Cash
50,000
Long Term Loan
1,500,000
9,475,263
9,475,263
The following additional information as at 30 September 2018 is available:
a) Rent is owing, $15,000.
b) Rates has been prepaid by $6,000
c) Provision for doubtful debt is to be set up at a rate of 10% on debtors.
d) Depreciation rates are as follows:
Equipment - 10 %, using the
Building - 5%, using the straight line method
Motor vehicle - 20%, using the
e) Inventory at the close of business was valued at $131,000.
f) Advertising is prepaid by $20,000
g) Ms. James took $30,000 of goods for personal use and this was not recorded in the books.
what is the Net sales for the year was:
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