The following additional information was made available before the year-end closing: 1. Inventory as at 30 June 2020 amounted to $146,700 after a physical stock count. $15,900 was received in June 2020 for goods to be delivered in July 2020. This had been recorded as cash sales for the year ended 30 June 2020. 2. 3. Utilities expense consisted of payment made from July 2019 to February 2020. Monthly utilities expense is assumed to remain constant during the current financial year. The bank loan was taken up on 1 January 2020. The outstanding interest on the loan for year has not been accounted for as at year-end. 4. 5. Rent for the last two months of the financial year was paid by Jean Fit using her personal funds. The payments have been charged to rent expense and recorded as trade payables. Monthly rent remained constant throughout the current financial year and there was no outstanding rent to be paid as at year-end. 6. Insurance expense includes payment of $27,300 for May 2020 to November 2020. In April 2020, a credit customer paid $68,400 in settlement of an outstanding amount after deducting a 5% discount for prompt payment. This transaction has been omitted in the records of Move-It. 7. 8. Commission earned amounting to $9,300 was received in September 2019 was recorded in the correct accounts at $9,030. 9. The amount of annual depreciation on fixed assets were as follows: $21,460 Building Equipment $13,720 10. $7,600 paid for staff salaries in June 2020 was erroneously charged to purchases. Required: (a) Prepare the necessary general journal entries to record transactions (2) to (10). Narrations are not required. (Hint: For some transactions, you will need to create new accounts which are not shown on the trial balance.) (b) Prepare the following financial statements for Move-It: (i) Statement of Comprehensive Income for the year ended 30 June 2020 (ii) Statement of Financial Position as at 30 June 2020
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.
What is the General
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