From the following particulars taken out from the books of Shri Kerkar, prepare trading and profit and loss account for the year ended on 31st March 2014 and balance sheet as on that date: 52,000 22,000 Insurance premium paid for 01-01-2014 to 31-12-2014 Sundry debtors Creditors 2,400 Cash in hand 2,392 Cash at bank 6.200 24,000 3,500 Machinery 22,000 Wages Fumiture Motor-car 23,600 General expenses 1,45,000 2,92,000 Carriage inwards 2,600 Carriage outwards Purchases 2,680 Sales 2,040 Sales returns 1,630 Fuel and power Kerkar's capital 6,430 20,000 Salaries 8,420 Opening stock 11,400 6,108 Drawings 3,600 Motor-car expenses 8,000 Rent, rates and taxes The following information is relevant: (i) Closing stock ? 37,000. (ii) ? 1,000 paid for machinery erections was debited to wages account. ii) Write off further bad debts 7 2,000 and make provision for doubtful debts at 5% on debtors. iv) Depreciate furniture and machinery by 10% and motor-car by 20%. (v) Commission of 3,000 has been earned but not received till the close of the accounting year (V1) An amount of ? 10,000 was borrowed from Mr. Pran on Ist Oct, 2013 and it was returned o 31st March, 2014. However, interest at 10% p.a. still remains unpaid. (vii) Bill receivable ? 1,000 not yet due was discounted on 31st March, 2014.
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
