ix) Wages and salaries are expected to be $2,304,000 per annum and will be paid monthly. x) In the month of August, furniture & fixtures, which cost $455,000, will be sold to an employee at a loss of $20,000. Accumulated depreciation on the furniture & fixtures at that time is expected to be $305,000. The employee will be allowed to pay a deposit equal to 60% of the selling price in August with the balance settled in two equal amounts in September & October. xi) As part of its investing activities, the management of Sallat Household Furnishings & Appliances is in the process of completing a major addition to the business property, which is estimated to cost $1,200,000, and which is being funded by external borrowing. $420,000 of the principal, along with interest of $14,200 is due to be paid on July 15, 2022. xii) The cash balance on September 30, 2022, is expected to be an overdraft of $147,500.
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.
![ix) Wages and salaries are expected to be $2,304,000 per annum and will be paid monthly.
x)
In the month of August, furniture & fixtures, which cost $455,000, will be sold to an
employee at a loss of $20,000. Accumulated depreciation on the furniture & fixtures at that
time is expected to be $305,000. The employee will be allowed to pay a deposit equal to
60% of the selling price in August with the balance settled in two equal amounts in
September & October.
xi) As part of its investing activities, the management of Sallat Household Furnishings &
Appliances is in the process of completing a major addition to the business property, which
is estimated to cost $1,200,000, and which is being funded by external borrowing. $420,000
of the principal, along with interest of $14,200 is due to be paid on July 15, 2022.
xii) The cash balance on September 30, 2022, is expected to be an overdraft of $147,500.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab89f2fd-2d90-4d55-9e01-3ab3450cbdbc%2F58ea9b27-dc94-4d50-9da3-dd16139493a1%2F14idtat_processed.jpeg&w=3840&q=75)
![SALLAT Household Furnishings & Appliances is a family-owned business. You are the
management accountant of the entity and have been given the task of preparing the cash budget
for the business for the quarter ending September 30, 2022. Your data collection has yielded the
following:
i) Extracts from the sales and purchases budgets are as follows:
Cash
Sales
Cash
Purchases
Month
Sales
On Account
Purchases
On Account
May
June
July
August
September
$75,000
$135,000
$86,800
$105,600
$112,500
$480,000
$600,000
$720,000
$640,000
$800,000
$36,000
$61,700
$68,800
$77,250
$390,000
$360,000
$450,000
$400,000
$500,000
ii)
An analysis of the records shows that trade receivables (accounts receivable) for sales on
account are settled according to the following credit pattern, in accordance with the credit
terms 5/30, n90:
50% in the month of sale
35% in the first month following the sale
15% in the second month following the sale
iii) Accounts Payable are settled as follows, in accordance with the credit terms – 4/30, n60:
70% in the month in which the inventory is purchased
30% in the following month
Computer equipment, which is estimated to cost $350,000, will be acquired in August. The
manager has planned with the supplier to make a cash deposit of 50% of the amount upon
signing of the agreement in August, with the balance to be settled in four equal monthly
instalments, starting in September 2022.
iv)
v)
A treasury bond purchased by the company with a face value of $560,000 is expected to
mature on July 20, 2022. To meet the financial obligations of the business the management
team has decided to liquidate the investment upon maturity. On that date, quarterly interest
computed at a rate of 7½ % per annum is also expected to be collected.
vi) Fixed operating expenses, which accrue evenly throughout the year, are estimated to be
$1,812,000 per annum [including depreciation on non-current assets of $37,000 per month]
and are settled monthly.
vii) The management Sallat Household has negotiated with a tenant for rental of storage space
beginning on July 1. The rental is expected to be $840,000 per annum and will be paid over
by the tenant quarterly in advance. Rental relating to the quarter under review becomes
due on July 1.
viii) Other operating expenses are expected to be $432,000 per annum and will be settled
monthly.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab89f2fd-2d90-4d55-9e01-3ab3450cbdbc%2F58ea9b27-dc94-4d50-9da3-dd16139493a1%2Fmdduo72_processed.jpeg&w=3840&q=75)
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