The accounts listed below have been taken from Davies Co.’s general ledger as of December 31, 2020. The accounts all have normal balances. This is the end of Davies Co.’s first year of operations. Cash.............................................................................$ 34,000 Buildings (net)..............................................................210,000 Note Payable................................................................72,000 Salary Expense............................................................19,000 Inventory......................................................................36,000 Accounts Payable........................................................60,000 Common Stock.............................................................185,000 Accounts Receivable....................................................48,000 Sales............................................................................_____ Notes Receivable.........................................................22,000 Bonds Payable.............................................................75,000 Rent Expense...............................................................15,000 Land.............................................................................125,000 Cost of Goods Sold......................................................165,000 Tax Expense................................................................20,000 Tax Payable.................................................................31,000 Determine sales for the year and prepare the following items for Davies Co. as of the year ended December 31, 2020: a.trial balance b.calculate net income for the year c. calculate: total assets total liabilities stockholders' equity
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.
The accounts listed below have been taken from Davies Co.’s general ledger as of December 31, 2020. The accounts all have normal balances. This is the end of Davies Co.’s first year of operations.
Cash.............................................................................$ 34,000
Buildings (net)..............................................................210,000
Note Payable................................................................72,000
Salary Expense............................................................19,000
Inventory......................................................................36,000
Accounts Payable........................................................60,000
Common Stock.............................................................185,000
Sales............................................................................_____
Notes Receivable.........................................................22,000
Bonds Payable.............................................................75,000
Rent Expense...............................................................15,000
Land.............................................................................125,000
Cost of Goods Sold......................................................165,000
Tax Expense................................................................20,000
Tax Payable.................................................................31,000
Determine sales for the year and prepare the following items for Davies Co. as of the year ended December 31, 2020:
a.trial balance
b.calculate net income for the year
c. calculate: total assets
total liabilities
A trial balance's main function is to confirm that the entries in a firm's accounting system are mathematically valid.
An income statement is a financial report that indicates the revenue and expenses of a business. It also indicates when a business is profitable or losing money for a given time span.
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