Trial Balance for ABC Retails for year ended 30 June 2018 and 2019 2019 2018 Debit $ Credit $ Debit $ Credit $ Capital 253,150 241,250 Drawings 5,480 11,400 Inventory at 1/7 13,600 14,400 Accounts Receivable 10,800 9,600 Cash at Bank 30,200 8,500 Land 100,000 100,000 Buildings 94,000 94,000 Accumulated Depreciation Buildings Plant & Machinery Accumulated Depreciation Plant/Machinery Accounts Payable Sales Accrued Expenses Purchases Sales Salaries Rates and Taxes Electricity & Telephone |Office Wages Depreciation on Buildings 12,000 8,000 110,000 85,000 51,800 34,000 15,230 16,250 324,000 298,000 1,200 1,100 214,000 178,000 23,000 22,000 7,100 7,300 12,600 11,400 24,200 24,500 4,000 4,000 Depreciation on Plant and Machinery General Expenses Prepaid Expenses 17,800 17,000 12,300 9,700 1,600 1,800 657,380 657,380 598,600 598,600 Inventory at 30/6 14,200 13,600
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.
Question 1
The
ABC Retails currently has one location and has been operating from this location for the past two years. The financial reports presented by you will help management decide whether to expand in the future.
From the information provided, complete the following questions for ABC Retails:
Compile a Balance Sheet as at 30 June 2018 and 2019.
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