QUESTION 2 Xhana Ltd.is a dealer in motor vehicle parts. The information in the table below and the additional information relate to the business. Forecast income and expenditure for June-September Details June July August September Revenue Pula Pula Pula Pula Cash sales 6,400 7,800 6,700 7,300 Credit sales 6,700 9,100 4,600 5,700 Expenditure Salaries 2,100 2,100 2,100 2,100 Inventories purchases 5,500 6,100 8,400 7,500 Additional information The bank balance at the beginning of July was P2,200 Credit sales receipts are 60% in the month of sales and 40% in the following month. Other expenses are paid for in the month in which they are incurred iv. Inventories purchases are paid for 40% in the month of purchase and 60% in the following month. A staff canteen kitchen equipment is to be purchased in July and paid for in three months with a deposit of P2,000 in July and installments of P4,000 in August and P2,000 in September. Required: Prepare a cash budget for the company for the months July, August and September.
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.
QUESTION 2
Xhana Ltd.is a dealer in motor vehicle parts. The information in the table below and the additional information relate to the business.
|
Details |
June |
July |
August |
September |
|
Revenue |
Pula |
Pula |
Pula |
Pula |
|
Cash sales |
6,400 |
7,800 |
6,700 |
7,300 |
|
Credit sales |
6,700 |
9,100 |
4,600 |
5,700 |
|
Expenditure |
|
|
|
|
|
Salaries |
2,100 |
2,100 |
2,100 |
2,100 |
|
Inventories purchases |
5,500 |
6,100 |
8,400 |
7,500 |
Additional information
- The bank balance at the beginning of July was P2,200
- Credit sales receipts are 60% in the month of sales and 40% in the following month.
- Other expenses are paid for in the month in which they are incurred iv. Inventories purchases are paid for 40% in the month of purchase and 60% in the following month.
- A staff canteen kitchen equipment is to be purchased in July and paid for in three months with a deposit of P2,000 in July and installments of P4,000 in August and P2,000 in September.
Required:
Prepare a
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