J Horner is the proprietor of a shop selling paintings and ornaments. For the purposes of his financial statements, he wishes the business to be divided into two departments: Department A Paintings Department B Ornaments The following balances have been extracted from his nominal ledger at 31 August 2015: Dr Cr Ksh. Ksh. Sales Department A 75,000 Sales Department B 50,000 Stocks Department A, 1 September 2014 1,250 Stocks Department B, 1 September 2014 1,000 Purchases Department A 51,000 Purchases Department B 38,020 Wages of sales assistants Department A 7,200 Wages of sales assistants Department B 6,800 Picture framing costs 300 General office salaries 13,200 Fire insurance – buildings 360 Lighting and heating 620 Repairs to premises 175 Internal telephone 30 Cleaning 180 Accountancy charges 1,490 General office expenses 510 Stocks at 31 August 2015 were valued at: Department A Ksh.1,410 Department B Ksh.912 The proportion of the total floor area occupied by each department was: Department A two-fifths Department B three-fifths The apportionment should be made by using the methods as shown: Area – Fire insurance, Lighting and heating, Repairs, Telephone, Cleaning. Turnover – General office salaries, Accountancy, General office expenses and picture framing costs. Required: Prepare Benard’s: Trading and profit and loss account (Income Statement) for the year ended 31 August 2015, apportioning the costs, where necessary, to show the Department profit or loss.
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.
J Horner is the proprietor of a shop selling paintings and ornaments. For the purposes of his financial statements, he wishes the business to be divided into two departments:
Department A Paintings
Department B Ornaments
The following balances have been extracted from his nominal ledger at 31 August 2015:
| Dr | Cr | |
| Ksh. | Ksh. | |
| Sales Department A | 75,000 | |
| Sales Department B | 50,000 | |
| Stocks Department A, 1 September 2014 | 1,250 | |
| Stocks Department B, 1 September 2014 | 1,000 | |
| Purchases Department A | 51,000 | |
| Purchases Department B | 38,020 | |
| Wages of sales assistants Department A | 7,200 | |
| Wages of sales assistants Department B | 6,800 | |
| Picture framing costs | 300 | |
| General office salaries | 13,200 | |
| Fire insurance – buildings | 360 | |
| Lighting and heating | 620 | |
| Repairs to premises | 175 | |
| Internal telephone | 30 | |
| Cleaning | 180 | |
| Accountancy charges | 1,490 | |
| General office expenses | 510 | |
Stocks at 31 August 2015 were valued at:
Department A Ksh.1,410
Department B Ksh.912
The proportion of the total floor area occupied by each department was:
Department A two-fifths
Department B three-fifths
The apportionment should be made by using the methods as shown:
Area – Fire insurance, Lighting and heating, Repairs, Telephone, Cleaning.
Turnover – General office salaries, Accountancy, General office expenses and picture framing costs.
Required:
Prepare Benard’s: Trading and
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