PROBLEM #2 BizKid Company's adjusted trial balance on August 31, 2011, its fiscal year-end, follows. Merchandise inventory. 31,000 Other (non-inventory) assets...... 120,400 Total liabilities...... N. Kidman, Capital . N. Kidman, Withdrawals. 35,000 ...101,650 8,000 Sales..... 212,000 Sales discounts ... 3,250 Sales returns and allowances. 14,000 Cost of goods sold.. Sales salaries expense... Rent expense - Selling space. Store supplies expense.. Advertising expense... Office salaries expense.. Rent expense – Office space. Office supplies expense.. .82,600 29,000 .... 10,000 .... 2,500 18,000 .26,500 2,600 800 On August 31, 2010, merchandise inventory was P25,000. Supplementary records of merchandising activities for the year ended August 31, 2011, reveal the following itemized costs. Invoice cost of merchandise purchases. .P91,000 Purchase discounts received.... Purchase returns and allowances... .1,900 4,400 Costs of transportation-in... 3,900
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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PROBLEM #2
BizKid Company's adjusted trial balance on
August 31, 2011, its fiscal year-end, follows.
Merchandise inventory
31,000
Other (non-inventory) assets.
. 120,400
Total liabilities
35,000
N. Kidman, Capital.
.101,650
N. Kidman, Withdrawals
8,000
Sales..
212,000
Sales discounts..
3,250
Sales returns and allowances.
14,000
Cost of goods sold
Sales salaries expense.
Rent expense - Selling space.
Store supplies expense
Advertising expense
Office salaries expense.
.82,600
29,000
10,000
2,500
18,000
.26,500
Rent expense - Office space
Office supplies expense.
2,600
800
On August 31, 2010, merchandise inventory was
P25,000. Supplementary records of
merchandising activities
for the year ended August 31, 2011, reveal the
following itemized costs.
Invoice cost of merchandise purchases.
.P91,000
Purchase discounts received.
..1,900
Purchase returns and allowances
4,400
Costs of transportation-in..
3,900](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8de53e9-1a03-4a63-9543-bf6a23952f5a%2Fa3364013-7e0d-4d06-b8be-88ee0d330a30%2F8p4fx_processed.jpeg&w=3840&q=75)
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