scual Co, received the goods and llano Co.'s invoice on June 17. On June 24, Pascual Co. sent the payment to llano Co., which llano Co. received on June 25. Both llano Co. and Pascual Co. use the periodic inventory system. The following are several arrangements regarding the shipping costs: a. Shipping terms are FOB shipping point, freight prepaid. Llano paid the shipping costs on June 16 and added the 600 cost to the invoice sent to Pascual. Pascual remitted 6480 on June 24.: 1. Prepare the entries for llan
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.
On June 16, 2013, llano Co. sold merchandise to PascualCo. for 6k terms 2/10, n/30. Shipping costs were 600. Pascual Co, received the goods and llano Co.'s invoice on June 17. On June 24, Pascual Co. sent the payment to llano Co., which llano Co. received on June 25. Both llano Co. and Pascual Co. use the periodic inventory system. The following are several arrangements regarding the shipping costs:
a. Shipping terms are FOB shipping point, freight prepaid. Llano paid the shipping costs on June 16 and added the 600 cost to the invoice sent to Pascual. Pascual remitted 6480 on June 24.:
1. Prepare the entries for llano Co. to record sale and freight payment and the cash receipt.
2. Prepare the entries for Pascual Co. to record the purchase, (with shipping cost added to the invoice from Ilano) and the cash remittance
b. Shipping terms are FOB destination, freight collect. Pascual Co. paid the shipping costs on June 17 and deducted the 600 from the amount owed to llano Co. A copy of the freight bill to llano Co. was provided with the June 24 cash remittance. Pascual Co. remitted 5280 on June 24
Required: 1. Prepare the entries for llano Co. to record sale and cash receipt.
2. Prepare the entries for Pascual Co. to record the purchase, the freight payment, and the cash remittance.
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