The Income Statement and Balance Sheet columns below are from the work sheet of the Mandle Company for the year ended December 31, 20--. Mandle Company Work Sheet (partial) For the year ended December 31, 20-- Income Statement Balance Sheet Account Title Debit Credit Debit Credit Cash 24,000 Accounts Receivable 12,500 Merchandise Inventory 8,000 Store Supplies 550 Office Supplies 1,200 Prepaid Insurance 750 Store Equipment 33,000 Accumulated Depreciation—Store Equipment 19,000 Office Equipment 9,000 Accumulated Depreciation—Office Equipment 5,000 Accounts Payable 9,900 Salaries Payable 200 Long-Term Notes Payable 18,000 H. Mandle, Capital 45,300 H. Mandle, Drawing 16,000 Income Summary 8,500 8,000 Sales 31,000 Sales Returns and Allowances 250 Purchases 13,500 Purchases Returns and Allowances 350 Purchases Discounts 200 Sales Salary Expense (selling) 4,600 Office Salary Expense (general) 3,500 Store Supplies Expense (selling) 150 Office Supplies Expense (general) 200 Insurance Expense (general) 400 Depreciation Expense—Store Equipment (selling) 400 Depreciation Expense—Office Equipment (general) 450 31,950 39,550 105,000 97,400 Net Income 7,600 7,600 39,550 39,550 105,000 105,000 Required: Prepare a multi-step income statement for Mandle Company for the current fiscal year. Include separate sections for selling expenses and general expenses under the heading "Operating Expenses" by using the classifications provided in the Account Title column of the work sheet. Mandle Company Income Statement For the year ended December 31, 20-- Revenue: $fill in the blank 2 fill in the blank 4 $fill in the blank 6 Cost of goods sold: $fill in the blank 8 $fill in the blank 10 $fill in the blank 12 fill in the blank 14 fill in the blank 15 fill in the blank 17 $fill in the blank 19 fill in the blank 21 fill in the blank 23 $fill in the blank 25 Operating expenses: Selling expenses: $fill in the blank 27 fill in the blank 29 fill in the blank 31 Total selling expenses $fill in the blank 32 General expenses: $fill in the blank 34 fill in the blank 36 fill in the blank 38 fill in the blank 40 Total general expenses fill in the blank 41 Total operating expenses fill in the blank 42 $fill in the blank 44
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 Income Statement and Balance Sheet columns below are from the work sheet of the Mandle Company for the year ended December 31, 20--.
| Mandle Company Work Sheet (partial) For the year ended December 31, 20-- |
|||||||
| Income Statement | Balance Sheet | ||||||
| Account Title | Debit | Credit | Debit | Credit | |||
| Cash | 24,000 | ||||||
| Accounts Receivable | 12,500 | ||||||
| Merchandise Inventory | 8,000 | ||||||
| Store Supplies | 550 | ||||||
| Office Supplies | 1,200 | ||||||
| Prepaid Insurance | 750 | ||||||
| Store Equipment | 33,000 | ||||||
| 19,000 | |||||||
| Office Equipment | 9,000 | ||||||
| Accumulated Depreciation—Office Equipment | 5,000 | ||||||
| Accounts Payable | 9,900 | ||||||
| Salaries Payable | 200 | ||||||
| Long-Term Notes Payable | 18,000 | ||||||
| H. Mandle, Capital | 45,300 | ||||||
| H. Mandle, Drawing | 16,000 | ||||||
| Income Summary | 8,500 | 8,000 | |||||
| Sales | 31,000 | ||||||
| Sales Returns and Allowances | 250 | ||||||
| Purchases | 13,500 | ||||||
| Purchases Returns and Allowances | 350 | ||||||
| Purchases Discounts | 200 | ||||||
| Sales Salary Expense (selling) | 4,600 | ||||||
| Office Salary Expense (general) | 3,500 | ||||||
| Store Supplies Expense (selling) | 150 | ||||||
| Office Supplies Expense (general) | 200 | ||||||
| Insurance Expense (general) | 400 | ||||||
| Depreciation Expense—Store Equipment (selling) | 400 | ||||||
| Depreciation Expense—Office Equipment (general) | 450 | ||||||
| 31,950 | 39,550 | 105,000 | 97,400 | ||||
| Net Income | 7,600 | 7,600 | |||||
| 39,550 | 39,550 | 105,000 | 105,000 |
Required:
Prepare a multi-step income statement for Mandle Company for the current fiscal year. Include separate sections for selling expenses and general expenses under the heading "Operating Expenses" by using the classifications provided in the Account Title column of the work sheet.
| Mandle Company | ||||
| Income Statement | ||||
| For the year ended December 31, 20-- | ||||
| Revenue: | ||||
| $fill in the blank 2 | ||||
| fill in the blank 4 | ||||
| $fill in the blank 6 | ||||
| Cost of goods sold: | ||||
| $fill in the blank 8 | ||||
| $fill in the blank 10 | ||||
| $fill in the blank 12 | ||||
| fill in the blank 14 | fill in the blank 15 | |||
| fill in the blank 17 | ||||
| $fill in the blank 19 | ||||
| fill in the blank 21 | ||||
| fill in the blank 23 | ||||
| $fill in the blank 25 | ||||
| Operating expenses: | ||||
| Selling expenses: | ||||
| $fill in the blank 27 | ||||
| fill in the blank 29 | ||||
| fill in the blank 31 | ||||
| Total selling expenses | $fill in the blank 32 | |||
| General expenses: | ||||
| $fill in the blank 34 | ||||
| fill in the blank 36 | ||||
| fill in the blank 38 | ||||
| fill in the blank 40 | ||||
| Total general expenses | fill in the blank 41 | |||
| Total operating expenses | fill in the blank 42 | |||
| $fill in the blank 44 |
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