Using the trial balance for Mary Jane, with a closing stock of $1,000, prepare her Income Statement for the first month of business and her Balance Sheet as at the month end date. Mary Jane Trial Balance as at 30 September 2012 Account Dr. Cr. $ $ Cash 9,415 Bank 39,355 Sales 17,085 Purchases 9,000 Returns in 300 Returns out 400 Soo Trusty 600 Will Pay 1,050 Justin Fever 1,500 KG Traders 4,000 Batta Co. 2,100 Capital 20,000 Loan 28,500 Rent 4,000 Fixtures 3,000 Wages 2,000 Drawings 750 Telephone 560 Electricity 410 Interest 145 72,085 72,085
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.
Using the trial balance for Mary Jane, with a closing stock of $1,000, prepare her Income Statement for the first month of business and her Balance Sheet as at the month end date.
Mary Jane
Trial Balance as at 30 September 2012
Account Dr. Cr.
$ $
Cash 9,415
Bank 39,355
Sales 17,085
Purchases 9,000
Returns in 300
Returns out 400
Soo Trusty 600
Will Pay 1,050
Justin Fever 1,500
KG Traders 4,000
Batta Co. 2,100
Capital 20,000
Loan 28,500
Rent 4,000
Fixtures 3,000
Wages 2,000
Drawings 750
Telephone 560
Electricity 410
Interest 145
72,085 72,085
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