The accountant for Polo's Pet Shop prepared the following list of account balances from the entity's records for the financial year ended June 30, 2021: Sales Revenue $196,000 Cash $25,000 Accounts Receivable 14,500 Cost of Goods Sold 45,000 Equipment 56,000 Polo, Capital-1 July 2020 22,000 Accounts Payable 17,000 Notes Payable 15,000 General & Admin Expense 32,000 Inventory 1,500 Selling Expense 6,000 Accumulated Depreciation 12,000 Mortgage Payable 5,000 Land 66,000 Interest Expense 21,000 1. What is the amount of Gross profit presented in the income statement? 2. What is the amount of operating income (EBIT) in the income statement? 3. What is the amount of net profit for the financial year 2021? 4. What will be Polo's capital at the end of financial year 30 June 2021 if there was no withdrawal from Polo, but he contributed $10,000 more capital to the business?
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.
The accountant for Polo's Pet Shop prepared the following list of account balances from the entity's records for the financial year ended June 30, 2021:
|
Sales Revenue |
$196,000 |
|
Cash |
$25,000 |
|
|
14,500 |
|
Cost of Goods Sold |
45,000 |
|
Equipment |
56,000 |
|
Polo, Capital-1 July 2020 |
22,000 |
|
Accounts Payable |
17,000 |
|
Notes Payable |
15,000 |
|
General & Admin Expense |
32,000 |
|
Inventory |
1,500 |
|
Selling Expense |
6,000 |
|
|
12,000 |
|
Mortgage Payable |
5,000 |
|
Land |
66,000 |
|
Interest Expense |
21,000 |
|
1. What is the amount of Gross profit presented in the income statement?
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