Use the information provided below to prepare the Statement of Financial Position of Glendale Limited as at 31 May 2020. Ensure that the statement includes headings for Non-current assets, Current assets, Equity, Non-current liabilities and Current liabilities. The notes to the financial statements are not required. INFORMATION The following balances were obtained from the accounting records of Glendale Limited after all the adjustments and closing transfers were completed on 31 May 2020: R Shares in XYZ Limited Ordinary share capital Retained income Loan: Brits Bank Equipment Accumulated depreciation on equipment Inventory Debtors control Provision for bad debts Accrued income Bank (DR) Cash float Creditors control 600 000 1434 000 300 000 150 000 1 380 000 180 000 210 000 60 000 3 000 6 000 69 000 6 000 135 000 Accrued expenses South African Revenue Services: Company tax payable Shareholders for dividends (Dividends payable) 42 000 15 000 72 000 Additional information R30 000 of the loan balance of R150 000 is expected to be repaid during the next financial year.
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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