Juice World Jamaica Limited, a leading juice manufacturing company has recently hired you as an Accounting Officer. As per job description, you are required to assist in the preparation of the financial statements. The Accounts Manager has extracted a list of balances as at December 2021 for you to review. $ Revenue 7 600 010 Administrative Expenses 2 300 000 Distribution Costs 980 231 Interest paid on loan 125 000 Purchases 4 500 330 Inventories at 1 January 2021 1 018 900 Trade receivables 630 340 Provision for doubtful debts at Jan 2021 19 634 Bad debts 70 110 Non- current Investment 300 900 Additional notes i. Provide for Administrative Expenses of $500 000 paid in advance at 31 December 2021 and Distribution Costs of $50 528 owing at 31 December 2021 ii. Provision for Doubtful Debts is to be maintained at 10% of receivables iii. Inventories at 31 December 2021 were valued at $1 000 000 iv. Provide for corporation tax of $80 000 which is payable on October 1, 2022 v. Loan interest accrued $62 500 Required: A. Prepare for presentation to the shareholders a published Income Statement for the year ended 31 December 2021. B. Notes to the Income Statement.
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.
Juice World Jamaica Limited, a leading juice manufacturing company has recently hired you as
an Accounting Officer. As per job description, you are required to assist in the preparation of the
financial statements. The
for you to review.
$
Revenue 7 600 010
Administrative Expenses 2 300 000
Distribution Costs 980 231
Interest paid on loan 125 000
Purchases 4 500 330
Inventories at 1 January 2021 1 018 900
Trade receivables 630 340
Provision for doubtful debts at Jan 2021 19 634
Non- current Investment 300 900
Additional notes
i. Provide for Administrative Expenses of $500 000 paid in advance at 31 December 2021
and Distribution Costs of $50 528 owing at 31 December 2021
ii. Provision for Doubtful Debts is to be maintained at 10% of receivables
iii. Inventories at 31 December 2021 were valued at $1 000 000
iv. Provide for corporation tax of $80 000 which is payable on October 1, 2022
v. Loan interest accrued $62 500
Required:
A. Prepare for presentation to the shareholders a published Income Statement for the year
ended 31 December 2021.
B. Notes to the Income Statement.
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