Prepare the income statement and balance sheet for Ram-o-fun International. Use the accounts listed below to construct the statements. List of Accounts for RAM-O-FUN International FOR INCOME STATEMENT Insurance Expenses 40,000 Interest Expenses 14,000 Net Sales 1,100,000 COGS 99,400 Advertising Expense 190,000 Salaries 180,000 Utilities 6,800 FOR BALANCE SHEET Cash 800,000 Accounts Receivable 130,000 Notes Receivable 45,000 Land 1,000,000 Buildings 1,050,000 Equipment & Vehicles 650,000 Accounts Payable 45,000 Short-Term Notes Payable 10,000 Notes Payable (Long‑Term) 105,000 Bonds Payable 40,000 Common Stock 1,975,000 Retained Earnings 1,500,000
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.
Prepare the income statement and balance sheet for Ram-o-fun International. Use the accounts listed below to construct the statements.
List of Accounts for RAM-O-FUN International
FOR INCOME STATEMENT
Insurance Expenses 40,000
Interest Expenses 14,000
Net Sales 1,100,000
COGS 99,400
Advertising Expense 190,000
Salaries 180,000
Utilities 6,800
FOR BALANCE SHEET
Cash 800,000
Accounts Receivable 130,000
Notes Receivable 45,000
Land 1,000,000
Buildings 1,050,000
Equipment & Vehicles 650,000
Accounts Payable 45,000
Short-Term Notes Payable 10,000
Notes Payable (Long‑Term) 105,000
Bonds Payable 40,000
Common Stock 1,975,000
Retained Earnings 1,500,000
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