You have been provided with the following trial balance of Comvita for year ended 31st March and the management have requested you to apply accounting principles to prepare balance sheet and income statement for year ending 31st March 2019 and based on it provide an financial statement analysis reflecting the financial position of the Comvita to inform internal and external stakeholders. Trial Balance for Comvita Year Ended March 31, 2019 All figures are in ‘000 Account Name Debt Account Name Credit Accounting Fee 9000 Accounts payable 63600 Accounts receivable 286650 Accumulated Depreciation – Motor Vehicle 30000 Advertising 6000 Accumulated Depreciation – Office Equipment 6000 Bad Debts 1500 Mortgage-non current 282600 Bank 60240 Discount Received 31200 Bank Fees 300 Allowance for Doubtful Debts 2865 Freight Out 36000 Retained earnings 1365000 Cost of goods sold 630000 Sales 1218300 Motor Vehicle (cost) 60000 Share capital 360000 Motor Vehicle Expenses 13500 Accrued Expenses 7560 Depreciation – Motor Vehicle 7500 Depreciation – Office Equipment 1500 Sales Return 12000 Dividends 52800 Doubtful Debts 2865 General Repairs 1800 Insurance 6000 Interest 21420 Stock (at cost) 141000 Shares in other firms 1740000 Office Equipment (cost) 13500 Office Expenses 3000 Packaging 3000 Prepaid insurance 600 Rent – Office 15600 Rent – Shop 30750 Shop Expenses 2700 Wages – Office 60900 Wages – Shop 147000 3367125 3367125 Note:
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
|
Trial Balance for Comvita All figures are in ‘000 |
|||
|
Account Name |
Debt |
Account Name |
Credit |
|
Accounting Fee |
9000 |
Accounts payable |
63600 |
|
Accounts receivable |
286650 |
|
30000 |
|
Advertising |
6000 |
Accumulated Depreciation – Office Equipment |
6000 |
|
|
1500 |
Mortgage-non current |
282600 |
|
Bank |
60240 |
Discount Received |
31200 |
|
Bank Fees |
300 |
Allowance for Doubtful Debts |
2865 |
|
Freight Out |
36000 |
|
1365000 |
|
Cost of goods sold |
630000 |
Sales |
1218300 |
|
Motor Vehicle (cost) |
60000 |
Share capital |
360000 |
|
Motor Vehicle Expenses |
13500 |
Accrued Expenses |
7560 |
|
Depreciation – Motor Vehicle |
7500 |
|
|
|
Depreciation – Office Equipment |
1500 |
|
|
|
Sales Return |
12000 |
|
|
|
Dividends |
52800 |
|
|
|
Doubtful Debts |
2865 |
|
|
|
General Repairs |
1800 |
|
|
|
Insurance |
6000 |
|
|
|
Interest |
21420 |
|
|
|
Stock (at cost) |
141000 |
|
|
|
Shares in other firms |
1740000 |
|
|
|
Office Equipment (cost) |
13500 |
|
|
|
Office Expenses |
3000 |
|
|
|
Packaging |
3000 |
|
|
|
Prepaid insurance |
600 |
|
|
|
Rent – Office |
15600 |
|
|
|
Rent – Shop |
30750 |
|
|
|
Shop Expenses |
2700 |
|
|
|
Wages – Office |
60900 |
|
|
|
Wages – Shop |
147000 |
|
|
|
|
3367125 |
|
3367125 |
Note: Net realizable value of inventory is 1400000
Step by step
Solved in 2 steps
