Part 1. Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials Work in process Finished goods $42,000 $20,000 $36,000 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate of $16.50 per direct labor- hour was based on a cost formula that estimated $660,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: Raw materials were purchased on account, $520,000. Raw materials used in production, $465,000. All of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $605,000, indirect labor, $150,000, selling and administrative salaries, $240,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $357,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $505,000. • Manufacturing overhead cost was applied to production. The company actually. worked 42,000 direct labor-hours on all jobs during the year. Jobs costing $1,685,000 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $2,750,000. The jobs cost $1,695,000 to manufacture according to their job cost sheets.
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.
Record each transaction in a
Journals in case of job costing include the operating transactions related to purchase of material, transfer of material and workforce to WIP, and to finished goods after the completion of the final production stage.
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