The following information has been taken from the Ledger of Irfan Brothers Sadar Bazar, Karachi for the year ended on June 30, 2015. Stock of material, June 30 2015 Rs. 15,700 Stock of materials, July 1, 2014 12,000 Material purchased during the year 46,250 Carriage outward 1,075 Carriage inward 1,786 Salaries – Factory 1,625 Salaries – Office 3,150 Discount Expenses 725 Bad debts written off 1,628 Repairs of plant, machineries and tools 1,113 Rent and insurance – Factory 2,125 Rent and insurance – Office 500 Sales 115,275 Travelling Expenses 525 Traveler’s salaries and commission 1,925 Productive wages 31,500 Depreciation of machinery and tools 1,625 Depreciation of office furniture 75 Director’s fees 1,500 Gas, and water – Factory 300 Gas and water – Office 100 Manager’s salary (3/4th factory, 1/4th office) 2,500 General Expenses 850 Calculate Prime Cost.
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 following information has been taken from the Ledger of Irfan Brothers Sadar Bazar, Karachi for the year ended on June 30, 2015.
|
Stock of material, June 30 2015 |
Rs. 15,700 |
|
Stock of materials, July 1, 2014 |
12,000 |
|
Material purchased during the year |
46,250 |
|
Carriage outward |
1,075 |
|
Carriage inward |
1,786 |
|
Salaries – Factory |
1,625 |
|
Salaries – Office |
3,150 |
|
Discount Expenses |
725 |
|
|
1,628 |
|
Repairs of plant, machineries and tools |
1,113 |
|
Rent and insurance – Factory |
2,125 |
|
Rent and insurance – Office |
500 |
|
Sales |
115,275 |
|
Travelling Expenses |
525 |
|
Traveler’s salaries and commission |
1,925 |
|
Productive wages |
31,500 |
|
|
1,625 |
|
Depreciation of office furniture |
75 |
|
Director’s fees |
1,500 |
|
Gas, and water – Factory |
300 |
|
Gas and water – Office |
100 |
|
Manager’s salary (3/4th factory, 1/4th office) |
2,500 |
|
General Expenses |
850 |
Calculate Prime Cost.
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