The following ledger balances arranged in alphabetical order take from the books of Sunrise-in Trading for the year ended December 31, 2020: Based on the physical count, it was determined that Merchandise Inventory costing P150,000 is on hand as at Dec. 31, 2020. Advertising Expense P 27,500 Accounts Payable 40, 000 Accounts Receivable 65,000 Accumulated Depreciation- Building 70,000 Accumulated Depreciation- Equipment 65,000 Building 440,000 Cash 90,000 Christian Capital 714,000 Christian Drawing 90,000 Equipment 240,000 Land 40,000 Merchandise Inventory 180,000 Miscellaneous Expense 27,000 Notes Payable 15,000 Prepaid Insurance 2,000 Purchases 515,000 Purchases Discount 5,000 Purchases Return 4,000 Sales 992,500 Salaries Expense 200,000 Sales Return and allowances 6,000 Supplies 9,000 Telecommunication expense 12,500 Transportation expense 1,500 Unearned Revenue 100,000 Utilities Expense 60,000
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.
Prepare a
The following ledger balances arranged in alphabetical order take from the books of Sunrise-in Trading for the year ended December 31, 2020:
Based on the physical count, it was determined that Merchandise Inventory costing P150,000 is on hand as at Dec. 31, 2020.
|
Advertising Expense |
P 27,500 |
|
Accounts Payable |
40, 000 |
|
|
65,000 |
|
|
70,000 |
|
Accumulated Depreciation- Equipment |
65,000 |
|
Building |
440,000 |
|
Cash |
90,000 |
|
Christian Capital |
714,000 |
|
Christian Drawing |
90,000 |
|
Equipment |
240,000 |
|
Land |
40,000 |
|
Merchandise Inventory |
180,000 |
|
Miscellaneous Expense |
27,000 |
|
Notes Payable |
15,000 |
|
Prepaid Insurance |
2,000 |
|
Purchases |
515,000 |
|
Purchases Discount |
5,000 |
|
Purchases Return |
4,000 |
|
Sales |
992,500 |
|
Salaries Expense |
200,000 |
|
Sales Return and allowances |
6,000 |
|
Supplies |
9,000 |
|
Telecommunication expense |
12,500 |
|
Transportation expense |
1,500 |
|
Unearned Revenue |
100,000 |
|
Utilities Expense |
60,000 |
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