1) On the 1% day of December shepherds 's shoe store ordered inventory. They purchased 100 pairs of tennis shoes at $25 each on account, terms 3/15, n/30. 2) On the 3rd of the month, they returned 12 pairs that were the wrong style for credit. 3) On the 22 of the month, they paid for the purchase. (note discount period) 4) The first week, the store sold 12 pairs for $ 50 each in cash sales. 5) On the 10th, a sale of 30 pairs of shoes for $50 each was made to the razorbacks's basketball teams on account, terms 2/10, n/30. 6) 4 pairs of shoes were returned from a previous month sale that had a sales price of $50 per pair and a cost of $25 per pair. 7) The school paid for the purchase on the 16th of the month. Record the receipt of cash. (note discount period) 8) shepherd's purchased an additional 50 pairs of tennis shoes on the 20th from nike on account at a cost of $25 per pair with terms 2/10, net 30. 9) On the 22nd, they paid $ 60 cash for freight in on the latest purchase. 10) The company recorded cash sales for an additional 22 pairs of shoes for $65 each on the 24th of the month. 11) On the last day of the month, the company estimated sales returns for their sales. They estimate that 2% of sales willI be returned. (Hint: use total sales from above) Prepare the appropriate journal entries for each transaction under a perpetual inventory system.
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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