Colin Davis Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use. 1. An invoice for $8,100, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019. 2. Materials costing $28,000, shipped f.o.b. destination, were not entered by December 31, 2019, “because they were in a railroad car on the company's siding on that date and had not been unloaded.” 3. Materials costing $7,300 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier's place of business until January 6, 2020. 4. An invoice for $7,500, terms f.o.b. shipping point, was received and entered December 30, 2019. The receiving report shows that the materials were received January 4, 2020, and the bill of lading shows that they were shipped January 2, 2020. 5. Materials costing $19,800 were received December 30, 2019, but no entry was made for them because “they were ordered with a specified delivery of no earlier than January 10, 2020.” Instructions Prepare correcting general journal entries required at December 31, 2019, assuming that the books have not been closed.
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.
Colin Davis Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use.
1. An invoice for $8,100, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019.
2. Materials costing $28,000, shipped f.o.b. destination, were not entered by December 31, 2019, “because they were in a railroad car on the company's siding on that date and had not been unloaded.”
3. Materials costing $7,300 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier's place of business until January 6, 2020.
4. An invoice for $7,500, terms f.o.b. shipping point, was received and entered December 30, 2019. The receiving report shows that the materials were received January 4, 2020, and the bill of lading shows that they were shipped January 2, 2020.
5. Materials costing $19,800 were received December 30, 2019, but no entry was made for them because “they were ordered with a specified delivery of no earlier than January 10, 2020.”
Instructions
Prepare correcting general
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