[The following information applies to the questions displayed below.] Valley Company's adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative. Credit Adjusted Account Balances Merchandise inventory (ending) Other (non-inventory) assets Total liabilities Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-Selling space Store supplies expense Advertising expense Office salaries expense Rent expense-Office space Office supplies expense Totals Debit $ 41,000 164,000 Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in 8,000 4,291 18,509 108,210 38,420 13,181 3,365 $ 47,355 79,369 55,191 280,440 23,837 35,055 3,365 1,122 $ 462,355 $ 462,355 Beginning merchandise inventory was $33,087. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. $ 120,540 2,531 5,786 3,900 Required: Prepare closing entries as of August 31 (the perpetual inventory system is used).
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.
![Required information
[The following information applies to the questions displayed below.]
Valley Company's adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It
categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store
supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.
Adjusted Account Balances
Merchandise inventory (ending)
Other (non-inventory) assets
Total liabilities
Common stock
Retained earnings
Dividends
Sales
Sales discounts
Sales returns and allowances
Cost of goods sold
Sales salaries expense
Rent expense-Selling space
Store supplies expense
Advertising expense
Office salaries expense
Rent expense-Office space
Office supplies expense
Totals
Debit
$ 41,000
164,000
Invoice cost of merchandise purchases
Purchases discounts received
Purchases returns and allowances
Costs of transportation-in
8,000
4,291
18,509
108, 210
Credit
$ 47,355
79,369
55,191
280,440
38,420
13,181
3,365
23,837
35,055
3,365
1,122
$ 462,355 $ 462,355
Beginning merchandise inventory was $33,087. Supplementary records of merchandising activities for the year ended
August 31 reveal the following itemized costs.
$ 120,540
2,531
5,786
3,900
Required:
Prepare closing entries as of August 31 (the perpetual inventory system is used).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F63a8d7d0-46f6-4e65-8795-e1834362f810%2Ff350f16b-2626-4f10-93fc-2d3f83899c4d%2Fmyz0dln_processed.jpeg&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
