The trial balance of LBC Limited, a manufacturing firm for the year ended 31" December, 2019 is shown below: Debit GHe Credit GHe Inventories (1" January, 2019): Raw materials Work-in-progress Finished goods Fuel and light Administration salaries Rent and business rates Purchases of raw materials Sales Carriage outwards Royalties Direct wages Returns inward General office expenses Repairs to plant and machinery Trade Receivables and Payables Capital account Frechold premises Plant and machinery Accumulated depreciation on plant and machinery 21,000 14.000 23.000 21,000 17.000 21,000 258,000 482,000 4.000 20.000 39.000 7.000 9.000 9.000 20,000 37.000 457.000 410,000 80,000 8.000 Cash 11,000 984,000 984,000 You are given the following additional information: Inventories in hand at 31" December, 2019: Raw materials GH&25,000 Work in progress GH&11,000 Finished goods GH&26,000 11) Depreciation of 10% on plant and machinery using the straight line method. 80% of fuel and light and 75% of rent and rates to be charged to manufacturing. iv) v) Doubtful debts provision: 5% of Trade Receivables. GH&4,000 outstanding for fuel and light. Rent and business rates paid in advance: GHe5,000. Market value of finished goods: GHe382,000. Transfer goods at a cost plus profit of 20% You are required to prepare the: a. Manufacturing account for the year ending 31" December, 2019. b. Statement of profit or loss for the year ending 31" December, 2019. Statement of financial position as at 31" December, 2019
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.
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