Prepare a statement of Profit and Loss Appropriation, capital account, current account for the year ended 31 December 2020 and extract of statement of financial position at that date, from the following: i) Net profit RM30,350 ii) Interest to be charged on capital: Wong RM2,000; Pang RM1,500; Halim RM900. iii) Interest to be charged on drawings: Wong RM240; Pang RM180; Halim RM130. iv) Salaries to be credited: Pang RM2,000; Halim RM3,500 v) Profit to be shared: Wong 50%; Pang 30%; Halim 20% vi) Current account b/f: Wong RM1,860; Pang RM946; Halim RM717 vii) Capital account b/f: Wong RM40,000; Pang RM30,000; Halim RM18,000 viii) Drawings: Wong RM 9,200; Pang RM7,100; Halim RM6,900
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.
Question 2
Prepare a statement of
year ended 31 December 2020 and extract of
the following:
i) Net profit RM30,350
ii) Interest to be charged on capital: Wong RM2,000; Pang RM1,500; Halim RM900.
iii) Interest to be charged on drawings: Wong RM240; Pang RM180; Halim RM130.
iv) Salaries to be credited: Pang RM2,000; Halim RM3,500
v) Profit to be shared: Wong 50%; Pang 30%; Halim 20%
vi) Current account b/f: Wong RM1,860; Pang RM946; Halim RM717
vii) Capital account b/f: Wong RM40,000; Pang RM30,000; Halim RM18,000
viii) Drawings: Wong RM 9,200; Pang RM7,100; Halim RM6,900
Step by step
Solved in 4 steps
