Required information [The following information applies to the questions displayed below The following transactions apply to Ozark Sales for Yeart 1. The business was started when the company received $48.000 from the issue of common stock. 2. Purchased equipment inventory of $176.500 on account 3. Sold equipment for $204,000 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $129,000 4. Provided a six-month warranty on the equipment sold, Based on industry estimates, the warranty claims would amount to 4 percent of sales. 5. Paid the sales tax to the state agency on $154,000 of the sales 6. On September 1 Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. 7. Paid $5.600 for warranty repairs during the yeat 8. Paid operating expenses of $54.500 for the year 9. Paid $125,800 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. c. What is the total amount of current liabilities at December 31 Year 1? (Round your answer to the nearest dollar amount.) Total cume abtan
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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