Prepare: (iv) a statement of profit or loss (income statement) for the year to date; (v) a statement of financial position (balance sheet).
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.
8 January Sue started the business with $10,000 in cash
9 January Borrowed a sum of $8,000 in cash from Samvel, $400 of which is repayable on the first of every other month starting 1 February
1 February Repaid $200 in cash to Samvel
2 February Withdrew $300 cash from the business for her own use
3 February Bought a typewriter for $160 cash
4 February Bought goods on credit $3,500
5 February Sold goods for $3,200 cash
6 February Took for her own consumption goods which had cost $280
28 February Accrued interest expense of $40
28 February Closing inventory was $720
Required
Prepare:
(iv) a statement of profit or loss (income statement) for the year to date;
(v) a
BUT WE HAVE COMPLETED ONLY 9 CHAPTERS IN PRINCIPLES OF ACCOUNTING BY Marian Powers, Susan V Crosson, Belverd E Needles, so assuming this information we have to create general journal
Step by step
Solved in 2 steps
