The adjusted trial balance of One Incorporated showed the following at year end: Debit Credit Accounts Payable 1,960,000 Accounts Receivable 1,280,000 Accrued Interest - Note A 30,000 Accrued Interest - Note X 200,000 Accrued Interest - Note Y 50,000 Accrued Interest- Note B 24,000 Accumulated Depreciation - Factory Building 325,000 Accumulated Depreciation- Admin. Building 200,000 Accumulated Depreciation of Machinery and Equipment 270,000 Administrative Building 1,000,000 Advances to Customers 148,000 Advances to Suppliers 149,000 Allowance for Doubtful Accounts 58,000 Bonds Payable 2,000,000 Cash 540,000 Cash fund for acquisition of Building 1,500,000 Deferred Tax Liability 115,000 Disposal Group held for sale net of liabilities of 400,000 3,700,000 Equipment Held for Sale 1,120,000 Factory Building 1,500,000 Factory Supplies 270,000 Finished Goods Inventory 350,000 Franchise 580,000 Income Taxes Payable 220,000 Land held as future plant site 1,200,000 Machinery and Equipment 900,000 Notes Payable – Note X 1,250,000 Notes Payable – Note Y 2,500,000 Notes Receivable – Note A 600,000 Notes Receivable – Note B 700,000 Ordinary Share Capital, 5 par 3,500,000 Preference share capital, 10%, 1,000 par 1,800,000 Prepaid expenses 85,000 Raw Materials Inventory 440,000 Retained Earnings-Appropriated 640,000 Retained Earnings-Unappropriated 999,000 Share Premium 1,650,000 Sinking Fund for Bond Retirement 500,000 Trading securities 450,000 Treasury Shares 482,000 Unearned Rent Income 186,000 Work in process Inventory 375,000 Total 17,923,000 17,923,000 Additional Information: - The note payable to X is due next year while the note payable to Y is payable after three years - The note from A is due in three months while the note from B is due after 15 more months - The bonds payable will mature after 5 more years - The treasury shares represents ordinary shares acquired at 20 per share How many ordinary shares are eligible for dividends?
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 adjusted
|
Debit |
Credit |
|
|
Accounts Payable |
1,960,000 |
|
|
|
1,280,000 |
|
|
Accrued Interest - Note A |
30,000 |
|
|
Accrued Interest - Note X |
200,000 |
|
|
Accrued Interest - Note Y |
50,000 |
|
|
Accrued Interest- Note B |
24,000 |
|
|
|
325,000 |
|
|
Accumulated Depreciation- Admin. Building |
200,000 |
|
|
Accumulated Depreciation of Machinery and Equipment |
270,000 |
|
|
Administrative Building |
1,000,000 |
|
|
Advances to Customers |
148,000 |
|
|
Advances to Suppliers |
149,000 |
|
|
Allowance for Doubtful Accounts |
58,000 |
|
|
Bonds Payable |
2,000,000 |
|
|
Cash |
540,000 |
|
|
Cash fund for acquisition of Building |
1,500,000 |
|
|
|
115,000 |
|
|
Disposal Group held for sale net of liabilities of 400,000 |
3,700,000 |
|
|
Equipment Held for Sale |
1,120,000 |
|
|
Factory Building |
1,500,000 |
|
|
Factory Supplies |
270,000 |
|
|
Finished Goods Inventory |
350,000 |
|
|
Franchise |
580,000 |
|
|
Income Taxes Payable |
220,000 |
|
|
Land held as future plant site |
1,200,000 |
|
|
Machinery and Equipment |
900,000 |
|
|
Notes Payable – Note X |
1,250,000 |
|
|
Notes Payable – Note Y |
2,500,000 |
|
|
Notes Receivable – Note A |
600,000 |
|
|
Notes Receivable – Note B |
700,000 |
|
|
Ordinary Share Capital, 5 par |
3,500,000 |
|
|
|
1,800,000 |
|
|
Prepaid expenses |
85,000 |
|
|
Raw Materials Inventory |
440,000 |
|
|
|
640,000 |
|
|
Retained Earnings-Unappropriated |
999,000 |
|
|
Share Premium |
1,650,000 |
|
|
Sinking Fund for Bond Retirement |
500,000 |
|
|
Trading securities |
450,000 |
|
|
Treasury Shares |
482,000 |
|
|
Unearned Rent Income |
186,000 |
|
|
Work in process Inventory |
375,000 |
|
|
Total |
17,923,000 |
17,923,000 |
Additional Information:
- The note payable to X is due next year while the note payable to Y is payable after three years
- The note from A is due in three months while the note from B is due after 15 more months
- The bonds payable will mature after 5 more years
- The treasury shares represents ordinary shares acquired at 20 per share
How many ordinary shares are eligible for dividends?
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