GAF manufactures electrical cells at its St. Louis facility. The company’s fiscal year-end is September 30. It has adopted the perpetual inventory cost flow method to control inventory costs. The company entered into the following transactions during the month of September. All exchange rates are direct quotations. Date Transaction Billing Amount Rate of Exchange 2014 Sept. 5 Exported 10 electrical cells to a company located in Argentina. Cost per unit, $1,140. 17,504 pesos $1.1291 9 Received raw materials ordered from a British company. The goods were shipped FOB destination and had not been recorded on the books of GAF, Inc. 12,288 Pounds 1.6821 14 Exported 12 electrical cells to a company domiciled in Norway. Cost per unit, $1,160. 161,303 Krone 0.1450 30 End of fiscal year-end. Peso 1.1091 British pound 1.6911 Krone 0.1530 Date Transaction Billing Amount Rate of Exchange Oct. 5 Received full payment for the 10 units sold on September 5. 1.1190 9 Paid British company in full for raw materials purchased September 9. 1.5948 30 Received full payment for 12 units sold on September 14. 0.1440 (a) Prepare the journal entries required on the books of GAF to record the transactions and year-end adjustments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) (To record sales) (To record cost of goods sold) (To record gain or loss on accounts receivable of Sept. 5 sales) (To record gain or loss on accounts payable) (To record gain or loss on accounts receivable of Sept. 14 sales) Oct. 30
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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