Madelon Lee Company's general ledger included the following items related to its manufacturing activities for 2019. The accounts have been adjusted, but have not yet been closed: Raw Materials Inventory Work in Process Inventory P 84,600 99,360 Purchases-Raw Materials 311,400 Direct Labor 450,000 Indirect Labor 194,220 Factory Utilities Repairs and Maintenance-Factory Equipment Rent Expense-Factory Building Property Taxes-Factory Site Factory Insurance Expense Factory Supplies Expense Depreciation Expense-Factory Equipment 109,440 30,060 84,600 19,260 16,020 34,920 82,800 13,680 Amortization of Patents In addition, the ending inventory of raw materials is known to be P91,080. The ending inventory of Work in Process is not known, but it is known that the company makes a single product and 4,500 units of goods were in process on Dec. 31, 2019. Each unit contained an estimated P18 of direct materials and had P7.50 of direct labor cost assigned to it. Required: 1. Calculate the overhead rate based on the relationship between total manufacturing overhead cost and total direct labor cost. Then, determine the cost of the ending Work in Process inventory. 2. Prepare the statement of cost goods manufactured for 2019. 3. Prepare the journal entries to close the manufacturing accounts to manufacturing summary and to close the manufacturing summary account.
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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