Required information [The following information applies to the questions displayed below.] At the beginning of 2018, the Redd Company had the following balances in its accounts: $7,700 1,700 7, 200 2, 200 Cash Inventory Common stock Retained earnings During 2018, the company experienced the following events: 1. Purchased inventory that cost $5,200 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $470 were paid in cash. 2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Redd Company within the cash discount period. 4. Sold inventory that had cost $5,700 for $8,700 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $470 and was sold to the customer $770 cash. The customer was paid $770 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $570 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $1,400 of inventory was on hand at the end of the accounting period.
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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Required information
[The following information applies to the questions displayed below.]
At the beginning of 2018, the Redd Company had the following balances in its accounts:
$7,700
1,700
7, 200
2,200
Cash
Inventory
Common stock
Retained earnings
During 2018, the company experienced the following events:
1. Purchased inventory that cost $5,200 on account from Ross Company under terms 2/10, n/30. The merchandise was
delivered FOB shipping point. Freight costs of $470 were paid in cash.
2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed
to pay the return freight cost.
3. Paid the amount due on its account payable to Redd Company within the cash discount period.
4. Sold inventory that had cost $5,700 for $8,700 on account, under terms 2/10, n/45.
5. Received merchandise returned from a customer. The merchandise originally cost $470 and was sold to the customer
for $770 cash. The customer was paid $770 cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $570 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $1,400 of inventory was on hand at the end of the accounting period.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8151a55-1f97-4293-9574-706e6f6ba5ac%2F440bec0e-154d-4413-9a27-8495baa7a70b%2F84t9zqa_processed.png&w=3840&q=75)
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