You have been provided with the following information for LnS Shoe Outlet which accounts for its inventory using the periodic system. Its financial year ends September 30. All purchases and sales are made on account. Physical count at beginning of September 30, 2020 valued inventory of shoes at $469,780. Included in the physical count was shoes purchased for $20,840 on September 17 from Kmart. The shoes were shipped f.o.b. destination point on September 30 and arrived October 7. The invoice was received and recorded on appropriately. Shoes purchased from Walmart on September 25 for $17,080 and shipped f.o.b. destination were received on September 30 after inventory had been counted. The invoice was received and recorded appropriately. On September 29, shoes were received from Leather Made with an invoice price of $31,260. The shoes were shipped to LnS Shoe Outlet f.o.b. destination. The invoice, which had not yet arrived, had not been recorded on September 30. Chef shoes sold to Holiday Resorts on September 29, f.o.b. destination, were shipped on September 30. The invoice was prepared and recorded as a sale on September 30 for $25,600. The shoes had a cost of $14,700 and Holiday Resorts received the shoes on October 6. Shoes costing $92,000 were purchased and received from S&S Shoe Store on September 30 accompanied by an invoice annotated ’40 % on consignment’. The invoice was received and recorded appropriately. A box containing returned shoes (incorrect size) and labelled ‘Please Accept for Credit’ was placed in the front of the wharehouse on September 30 after the physical count was done. These shoes which cost $3,000 had been sold to a customer for $5,200. No entry had been made in the books to reflect the returns. Football shoes were sold to TTFA f.o.b. shipping point for $37,800 on September 30 (last transaction on the day). The cost of these shoes were $23,040. The shoes were shipped on October 1 and received by TTFA on October 4. Required: A. Compute the correct inventory balance for LnS Shoe Outlet at the end of its trading day, September 30, 2020. B. Prepare any necessary correcting journal entries to adjust inventory and related accounts to their proper amounts at September 30, 2020. Assume the books have not yet been closed.
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.
You have been provided with the following information for LnS Shoe Outlet which accounts for its inventory using the periodic system. Its financial year ends September 30. All purchases and sales are made on account.
Physical count at beginning of September 30, 2020 valued inventory of shoes at $469,780.
Included in the physical count was shoes purchased for $20,840 on September 17 from Kmart. The shoes were shipped f.o.b. destination point on September 30 and arrived October 7. The invoice was received and recorded on appropriately.
Shoes purchased from Walmart on September 25 for $17,080 and shipped f.o.b. destination were received on September 30 after inventory had been counted. The invoice was received and recorded appropriately.
On September 29, shoes were received from Leather Made with an invoice price of $31,260. The shoes were shipped to LnS Shoe Outlet f.o.b. destination. The invoice, which had not yet arrived, had not been recorded on September 30.
Chef shoes sold to Holiday Resorts on September 29, f.o.b. destination, were shipped on September 30. The invoice was prepared and recorded as a sale on September 30 for $25,600. The shoes had a cost of $14,700 and Holiday Resorts received the shoes on October 6.
Shoes costing $92,000 were purchased and received from S&S Shoe Store on September 30 accompanied by an invoice annotated ’40 % on consignment’. The invoice was received and recorded appropriately.
A box containing returned shoes (incorrect size) and labelled ‘Please Accept for Credit’ was placed in the front of the wharehouse on September 30 after the physical count was done. These shoes which cost $3,000 had been sold to a customer for $5,200. No entry had been made in the books to reflect the returns.
Football shoes were sold to TTFA f.o.b. shipping point for $37,800 on September 30 (last transaction on the day).
The cost of these shoes were $23,040. The shoes were shipped on October 1 and received by TTFA on October 4.
Required:
A. Compute the correct inventory balance for LnS Shoe Outlet at the end of its trading day, September 30, 2020.
B. Prepare any necessary correcting
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