Exercise 5-26 Preparing an income statement-periodic L07 The following adjusted account information, in alphabetical order, was taken from the work sheet of John's Electronics for the month ended April 30, 2020. A physical count on April 30, 2020, revealed a merchandise Inventory balance actually on hand of $2,540. No. 201 Accounts payable 154 Accumulated depreciation, trucks 101 Cash. 611 633 301 John's Electronics Unadjusted Trial Balance For Month Ended April 30, 2020 Account Depreciation expense, delivery trucks Interest expense John Yu, capital John Yu, withdrawals 302 119 Merchandise inventory 507 Purchase discounts 506 Purchase returns and allowances 505 Purchases 413 Sales 414 Sales returns and allowances 688 Telephone expense, office Telephone expense, store 689 508 Transportation-in 153 Trucks 623 Wages expense, office 624 Wages expense, selling Totals Required: a. Calculate net sales. Net sales Debit $ 2,000 720 110 9,600 6,500 16,940 1,820 140 420 460 Credit $ 2,198 16,400 27,176 36 100 37,798 30,400 5,700 8,800 $ 83,610 $ 83,618 4
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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