The Following Trail Balance has been extracted from the books of ABC Company on December 31st, 2018: Descriptions Debit Descriptions Debit Rs. Rs. Cash 8,200 Notes Payable 3,200 Accounts Receivable 41,000 Accounts Payable 12,350 Notes Receivable 23,000 Taxes Payable 1,500 Material (1-1-2018) 31,800 Rent Payable 1,020 Work in Process (1-1-2018) 4,000 Dividend Payable 500 Finished Goods (1-1--2018) 11,700 Sales 35,000 Prepaid Insurance 200 Common Stock 10,000 Machinery & Equipment 93,500 Retained Earnings 34,570 Purchased of Material 16,000 Accumulated Depreciation 20,000 Carriage inward 520 Direct Labor 33,000 Indirect Material 8,520 Indirect Labor 5,580 Depreciation - Factory 5,400 Utility - Factory 6,500 Carriage outward 460 Advertising 175 Salesmen Salary 565 Foreman Salary 7,000 Administrative Cost 1,020 318,140 318,140 During the year 70,000 units have been produced. The Following Further information are also available: Inventories at December 31st, 2018 Rs. Material 3,520 Work in Process 2,500 Finished Goods 10,000 Note: The factory overhead cost applied at the rate of 100% of direct labor cost. The actual FOH cost incurred during the period Rs. 31,480. Required a) Statement of Cost of Goods Manufactured at December 31st, 2018 b) Statement of Profit or Loss for the year ended December 31st, 2018.
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.
Q # 1
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The Following Trail Balance has been extracted from the books of ABC Company on December 31st, 2018: |
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Descriptions |
Debit |
Descriptions |
Debit |
|
Rs. |
Rs. |
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|
Cash |
8,200 |
Notes Payable |
3,200 |
|
Accounts Receivable |
41,000 |
Accounts Payable |
12,350 |
|
Notes Receivable |
23,000 |
Taxes Payable |
1,500 |
|
Material (1-1-2018) |
31,800 |
Rent Payable |
1,020 |
|
Work in Process (1-1-2018) |
4,000 |
Dividend Payable |
500 |
|
Finished Goods (1-1--2018) |
11,700 |
Sales |
35,000 |
|
Prepaid Insurance |
200 |
Common Stock |
10,000 |
|
Machinery & Equipment |
93,500 |
|
34,570 |
|
Purchased of Material |
16,000 |
|
20,000 |
|
Carriage inward |
520 |
|
|
|
Direct Labor |
33,000 |
|
|
|
Indirect Material |
8,520 |
|
|
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Indirect Labor |
5,580 |
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Depreciation - Factory |
5,400 |
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Utility - Factory |
6,500 |
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|
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Carriage outward |
460 |
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Advertising |
175 |
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Salesmen Salary |
565 |
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Foreman Salary |
7,000 |
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Administrative Cost |
1,020 |
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|
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|
318,140 |
|
318,140 |
During the year 70,000 units have been produced. The Following Further information are also available:
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Inventories at December 31st, 2018 |
Rs. |
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Material |
3,520 |
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Work in Process |
2,500 |
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Finished Goods |
10,000 |
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Note: The |
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The actual FOH cost incurred during the period Rs. 31,480. |
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Required |
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a) Statement of Cost of Goods Manufactured at December 31st, 2018
b) Statement of Profit or Loss for the year ended December 31st, 2018.
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