The following year-end information is taken from the December 31 adjusted trial balance and other records of Leone Company. Advertising expense $ 49,000 Depreciation expense—Office equipment 28,000 Depreciation expense—Selling equipment 29,000 Depreciation expense—Factory equipment 71,000 Raw materials purchases (all direct materials) 810,000 Maintenance expense—Factory equipment 42,300 Factory utilities 37,200 Direct labor 484,000 Indirect labor 73,000 Office salaries expense 44,000 Rent expense—Office space 26,000 Rent expense—Selling space 62,000 Rent expense—Factory building 149,000 Sales salaries expense 358,000 Use the following additional information for Leone Company Raw materials inventory, beginning $ 162,000 Raw materials inventory, ending 167,000 Work in process inventory, beginning 49,000 Sales 2,695,000 Work in process inventory, ending 53,000 Finished goods inventory, beginning 69,000 Finished goods inventory, ending 77,000 Prepare the current year income statement.
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 year-end information is taken from the December 31 adjusted
| Advertising expense | $ 49,000 |
|---|---|
| 28,000 | |
| Depreciation expense—Selling equipment | 29,000 |
| Depreciation expense—Factory equipment | 71,000 |
| Raw materials purchases (all direct materials) | 810,000 |
| Maintenance expense—Factory equipment | 42,300 |
| Factory utilities | 37,200 |
| Direct labor | 484,000 |
| Indirect labor | 73,000 |
| Office salaries expense | 44,000 |
| Rent expense—Office space | 26,000 |
| Rent expense—Selling space | 62,000 |
| Rent expense—Factory building | 149,000 |
| Sales salaries expense | 358,000 |
Use the following additional information for Leone Company
| Raw materials inventory, beginning | $ 162,000 |
|---|---|
| Raw materials inventory, ending | 167,000 |
| Work in process inventory, beginning | 49,000 |
| Sales | 2,695,000 |
| Work in process inventory, ending | 53,000 |
| Finished goods inventory, beginning | 69,000 |
| Finished goods inventory, ending | 77,000 |
Prepare the current year income statement.
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