The following is the adjusted trial balance data for Emma's Alterations as of December 31, 2019. Emma's Alterations Adjusted Trial Balance Year Ended December 31, 2019 Debit Credit Cash $603,538 Accounts Receivable 51,689 Equipment 199,430 Merchandise Inventory 169,744 Accounts Payable $234,893 Common Stock 502,200 Sales 400,593 Interest Revenue 100,976 Rent Revenue 65,200 Sales Salaries Expense 28,750 Office Supplies Expense 4,903 Sales Discounts 61,347 Interest Expense 3,570 Sales Returns and Allowances 55,632 Cost of Goods Sold 90,800 Rent Expense 10,600 Depreciation Expense-Office Equipment 8,560 Insurance Expense 3,421 Advertising Expense 11,878 Totals $1,303,862 $1,303,862 Question Content Area A. Use the data provided to compute net sales for 2019. $fill in the blank 5505dbf53068011_1 B. Compute the gross margin for 2019. $fill in the blank 5505dbf53068011_2 C. Compute the gross profit margin ratio (rounded to nearest hundredth). D. Prepare a simple income statement for the year ended December 31, 2019. Emma's AlterationsSimple Income StatementFor Year Ended December 31, 2019 Revenues: blank blank $Net Sales blank Rent Revenue blank Interest Revenue Total Revenues $fill in the blank 6c7dbd05f073f9e_7 Expenses: $Cost of Goods Sold Total Selling Expenses Total General and Administrative Expenses blank Interest Expense Total Expenses fill in the blank 6c7dbd05f073f9e_16 $Net Income E. Prepare a multi-step income statement for the year ended December 31, 2019. Emma's AlterationsMulti-step Income StatementFor Year Ended December 31, 2019 $Sales $Sales Discounts blank Sales Returns and Allowances Sales Returns and Allowances $Net Sales blank Cost of Goods Sold blank $Gross Margin Operating Expenses Selling Expenses blank blank $Advertising Expense Sales Salaries Expense blank Total Selling Expenses $fill in the blank 0d35b5058faeff6_18 General and Administrative Expenses blank $Depreciation Expense-Office Equipment blank Office Supplies Expense blank Rent Expense blank Insurance Expense blank Total General and Administrative Expenses $fill in the blank 0d35b5058faeff6_27 blank Total Operating Expenses blank fill in the blank 0d35b5058faeff6_28 Income from Operations blank $fill in the blank 0d35b5058faeff6_29 Other Revenue and Expenses blank blank $Interest Revenue blank Rent Revenue blank Interest Expense blank Total Other Revenue and Expenses blank fill in the blank 0d35b5058faeff6_36 $Net Income
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 is the adjusted
| Emma's Alterations Adjusted Trial Balance Year Ended December 31, 2019 |
||
| Debit | Credit | |
| Cash | $603,538 | |
| 51,689 | ||
| Equipment | 199,430 | |
| Merchandise Inventory | 169,744 | |
| Accounts Payable | $234,893 | |
| Common Stock | 502,200 | |
| Sales | 400,593 | |
| Interest Revenue | 100,976 | |
| Rent Revenue | 65,200 | |
| Sales Salaries Expense | 28,750 | |
| Office Supplies Expense | 4,903 | |
| Sales Discounts | 61,347 | |
| Interest Expense | 3,570 | |
| Sales Returns and Allowances | 55,632 | |
| Cost of Goods Sold | 90,800 | |
| Rent Expense | 10,600 | |
| 8,560 | ||
| Insurance Expense | 3,421 | |
| Advertising Expense | 11,878 | |
| Totals | $1,303,862 | $1,303,862 |
Question Content Area
A. Use the data provided to compute net sales for 2019.
$fill in the blank 5505dbf53068011_1
B. Compute the gross margin for 2019.
$fill in the blank 5505dbf53068011_2
C. Compute the gross profit margin ratio (rounded to nearest hundredth).
D. Prepare a simple income statement for the year ended December 31, 2019.
| Revenues: | blank | blank |
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$Net Sales | |
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blank | Rent Revenue |
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blank | Interest Revenue |
| Total Revenues | $fill in the blank 6c7dbd05f073f9e_7 | |
| Expenses: | ||
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$Cost of Goods Sold | |
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Total Selling Expenses | |
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Total General and Administrative Expenses | blank |
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Interest Expense | |
| Total Expenses | fill in the blank 6c7dbd05f073f9e_16 | |
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$Net Income |
E. Prepare a multi-step income statement for the year ended December 31, 2019.
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$Sales | |
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$Sales Discounts | blank |
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Sales Returns and Allowances | Sales Returns and Allowances |
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$Net Sales | |
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blank | Cost of Goods Sold |
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blank | $Gross Margin |
| Operating Expenses | ||
| Selling Expenses | blank | blank |
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$Advertising Expense | |
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Sales Salaries Expense | blank |
| Total Selling Expenses | $fill in the blank 0d35b5058faeff6_18 | |
| General and Administrative Expenses | blank | |
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$Depreciation Expense-Office Equipment | blank |
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Office Supplies Expense | blank |
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Rent Expense | blank |
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Insurance Expense | blank |
| Total General and Administrative Expenses | $fill in the blank 0d35b5058faeff6_27 | blank |
| Total Operating Expenses | blank | fill in the blank 0d35b5058faeff6_28 |
| Income from Operations | blank | $fill in the blank 0d35b5058faeff6_29 |
| Other Revenue and Expenses | blank | blank |
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$Interest Revenue | blank |
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Rent Revenue | blank |
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Interest Expense | blank |
| Total Other Revenue and Expenses | blank | fill in the blank 0d35b5058faeff6_36 |
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$Net Income |
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