Burda Alatau Press (the Company) is a publishing house based in Kazakhstan which is selling 28 different magazines on Kazakhstani market of which 24 are purchased directly from its immediate parent company Burda Russia based in Russian Federation. Some clients pay subscription fees in advance for the magazines, others are billed after magazines have been delivered. Adjusting entries are performed on a monthly basis. An unadjusted trial balance dated December 31, 2015, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2015, but not for December.) Other Data December 1 The Company issued 42,000 shares of capital stock in exchange for $42,000 cash. December 2 Purchased additional printing facilities (Office equipment) for $41,000. Made a $20,000 cash down payment and issued a note payable for the remaining amount owed. December 4 Purchased office supplies on account for 2900$ December 15 Billed customers $19,000 for the magazines sold during the first half of December. December 15 Paid $6,100 in salaries earned by employees during the first half of December. December 18 Paid $2150 for maintenance and repair services of the company’s office. Received a $4,300 bill from Burda Russia for advertising services provided in December. The entire amount is due January 10. December 25 Collected $9,000 of the amounts billed to customers on December 15. December 30 Billed customers $15,600 for the magazines sold during the second half of the month. December 30 Paid $5,500 in salaries earned by employees during the second half of the month. December 30 Declared a $4,000 dividend payable on January 15. Burda Alatau Press Trial Balance December 1, 2015 Cash 81 000 Accounts receivable 5 200 Office supplies 655 Office equipment 61 000 Accounts payable 4 500 Interest payable 940 Income taxes payable 6 500 Note payable 23 000 Capital stock 59 500 Retained earnings 40 000 Dividends 3 000 Subscription fees earned (Revenues) 63 040 Office supplies expense 560 Rent expense 3 500 Insurance expense 3 400 Salaries expense 31 000 Interest expense 565 Income taxes expense 7 600 Instructions Prepare a trial balance dated December 31, 2015. Using figures from the trial balance prepared in (1), prepare the Balance Sheet as at 31 December 2015 and the Income Statement for the period ended 31 December 2015.
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.
Burda Alatau Press (the Company) is a publishing house based in Kazakhstan which is selling 28 different magazines on Kazakhstani market of which 24 are purchased directly from its immediate parent company Burda Russia based in Russian Federation. Some clients pay subscription fees in advance for the magazines, others are billed after magazines have been delivered.
Other Data
- December 1 The Company issued 42,000 shares of capital stock in exchange for $42,000 cash.
- December 2 Purchased additional printing facilities (Office equipment) for $41,000. Made a $20,000 cash down payment and issued a note payable for the remaining amount owed.
- December 4 Purchased office supplies on account for 2900$
- December 15 Billed customers $19,000 for the magazines sold during the first half of December.
- December 15 Paid $6,100 in salaries earned by employees during the first half of December.
- December 18 Paid $2150 for maintenance and repair services of the company’s office. Received a $4,300 bill from Burda Russia for advertising services provided in December. The entire amount is due January 10.
- December 25 Collected $9,000 of the amounts billed to customers on December 15.
- December 30 Billed customers $15,600 for the magazines sold during the second half of the month.
- December 30 Paid $5,500 in salaries earned by employees during the second half of the month.
- December 30 Declared a $4,000 dividend payable on January 15.
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Burda Alatau Press |
|
|
Trial Balance |
|
|
December 1, 2015 |
|
|
Cash |
81 000 |
|
Accounts receivable |
5 200 |
|
Office supplies |
655 |
|
Office equipment |
61 000 |
|
Accounts payable |
4 500 |
|
Interest payable |
940 |
|
Income taxes payable |
6 500 |
|
Note payable |
23 000 |
|
Capital stock |
59 500 |
|
Retained earnings |
40 000 |
|
Dividends |
3 000 |
|
Subscription fees earned (Revenues) |
63 040 |
|
Office supplies expense |
560 |
|
Rent expense |
3 500 |
|
Insurance expense |
3 400 |
|
Salaries expense |
31 000 |
|
Interest expense |
565 |
|
Income taxes expense |
7 600 |
Instructions
- Prepare a trial balance dated December 31, 2015.
- Using figures from the trial balance prepared in (1), prepare the Balance Sheet as at 31 December 2015 and the Income Statement for the period ended 31 December 2015.
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