The following information has been prepared from the accounting records of Doubting Ltd for the six-months to 30 June 2010. The business uses a periodic inventory system. Accounts receivable: $ Balance 01/01/2010 178,300 Sales 1,846,500 Inventories 01/01/2010: Raw Materials 95,940 Factory Supplies 8,440 Finished Goods 174,690 Work in Process 28,650 Factory insurances: Prepaid 01/01/2010 2,920 Annual Premium paid 01/04/2010 12,360 Factory Plant & Equipment: At cost 01/01/2010 343,800 Accumulated Depreciation 01/01/2010 154,710 Depreciation - Straight-line @ 10% p.a. 189,090 Accounts payable: Balance 01/01/2010 45,180 Purchases - Raw materials 442,230 - Factory supplies 18,620 - Finished goods 38,730 Payments 317,840 Freight Inwards: Raw materials 15,450 Factory supplies 1,790 Freight outwards 50,060 Wages and salaries: Direct Labour 154,680 Indirect Labour 78,030 Factory Maintenance 11,430 Factory Lighting and Power: Accrued 01/01/2010 4,110 Payments 16,750 Other adjustments as at 30 June 2010: $ Inventories - Raw Materials 102,660 - Factory Supplies 9,070 - Finished Goods 171,890 - Work In Process 37,220 Annual Leave accrued - Factory 16,320 REQUIRED: Prepare the following statements (appropriately classified) for the six-months ended 30 June 2010: (a)Manufacturing statement and (b) A Trading statements.
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 following information has been prepared from the accounting records of Doubting Ltd for the six-months to 30 June 2010. The business uses a periodic inventory system.
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$ |
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Balance 01/01/2010 |
178,300 |
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Sales |
1,846,500 |
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Inventories 01/01/2010: |
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Raw Materials |
95,940 |
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Factory Supplies |
8,440 |
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Finished Goods |
174,690 |
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Work in Process |
28,650 |
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Factory insurances: |
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Prepaid 01/01/2010 |
2,920 |
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Annual Premium paid 01/04/2010 |
12,360 |
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Factory Plant & Equipment: |
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At cost 01/01/2010 |
343,800 |
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Accumulated |
154,710 |
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Depreciation - Straight-line @ 10% p.a. |
189,090 |
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Accounts payable: |
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Balance 01/01/2010 |
45,180 |
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Purchases |
- Raw materials |
442,230 |
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- Factory supplies |
18,620 |
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- Finished goods |
38,730 |
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Payments |
317,840 |
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Freight Inwards: |
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Raw materials |
15,450 |
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Factory supplies |
1,790 |
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Freight outwards |
50,060 |
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Wages and salaries: |
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Direct Labour |
154,680 |
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Indirect Labour |
78,030 |
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Factory Maintenance |
11,430 |
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Factory Lighting and Power: |
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Accrued 01/01/2010 |
4,110 |
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Payments |
16,750 |
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Other adjustments as at 30 June 2010: |
$ |
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Inventories |
- Raw Materials |
102,660 |
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- Factory Supplies |
9,070 |
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- Finished Goods |
171,890 |
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- Work In Process |
37,220 |
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Annual Leave accrued - Factory |
16,320 |
REQUIRED:
Prepare the following statements (appropriately classified) for the six-months ended 30 June 2010:
(a)Manufacturing statement and
(b) A Trading statements.
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