Q 4. Following are the five events of DDT CORPORATION: On December 31, purchased a machinery at a price of $ 6,00,000 and signed a note payable Due in six months with interest of 9 percent. On December 31, estimated that warranty work costing S 5,00,000 will need to be performed In coming months on those products which were sold in this year with a 12-month warranty. On December 31, pay checks totaling $ 289,000 were issued to employees .As these cheques Were issued after banking hours on December 31, no cash will be disbursed from payroll bank account until early in January next year. The amounts withheld from employee' pay and payroll taxes on the employer, S 51000 and $ 27000 respectively, were remitted to tax a. b. с. authorities next month. On November 1, borrowed $ 900000 from a bank signing a 90 day note payable for $ 918000, d. With interest included in the face amount. On November 3, signed a contract for the purchase of 30000 barrels of oil per month in the Coming year at a price of $ 30 per barrel. Required: Identify the S amounts that should appear in the current or long term liabilities sections at The year-end balance sheet of the current year and also identify figures with relevant Information that should be disclosed in the notes to financial statements. Briefly explain reasons underlying your answers. Assume the financial statements are completed and issued on January 15, next year.
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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