The following Journal entries occurred in 2019 SAS invested 100,000 in cash in the Purchased 3,000 of office supplies in Purchased equipment for 20,000, paying 15,000 in cash and the rest is on A customer purchased goods on account for 10,000 Withdrawals for personal expenses are 5,000 Paid 2,000 in cash for the current month's Paid 5,000 cash for insurance on the factory for 2 Received a bill for 1,000 for advertising for the current Paid $3,200 cash for office salaries and SAS withdrew $2,500 from the business for living Received $3,000 from a client in payment on account for sales billed in transaction Took a loan from XY Bank worth 20,000. Purchased a truch for $15,000 Sold goods for 7,000 Received 8,000 in advance from a client for work to be The following adjustments were found necessary at the end of the year: The Truck depreciates using units of activity It has a useful life of 5 years, a salvage value of $3000 and estimated 400,000 km to travel. By the end of the year the truck traveled 70,000 km. Office supplies on hand are 1,200. Interest on the loan is 18% annually and the loan was received November 1st. Prepaid insurance was paid on April 1st. Unearned revenues that should be realized totaled 2,500. Maintenance expenses that the accountant forgot to record totaled 3,000. Sales revenues that aren't recorded totaled 1,500. Required: Prepare the Income Statement for 2019 and Balance Sheet for December 31, 2019.
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.
The following
- SAS invested 100,000 in cash in the
- Purchased 3,000 of office supplies in
- Purchased equipment for 20,000, paying 15,000 in cash and the rest is on
- A customer purchased goods on account for 10,000
- Withdrawals for personal expenses are 5,000
- Paid 2,000 in cash for the current month's
- Paid 5,000 cash for insurance on the factory for 2
- Received a bill for 1,000 for advertising for the current
- Paid $3,200 cash for office salaries and
- SAS withdrew $2,500 from the business for living
- Received $3,000 from a client in payment on account for sales billed in transaction
- Took a loan from XY Bank worth 20,000.
- Purchased a truch for $15,000
- Sold goods for 7,000
- Received 8,000 in advance from a client for work to be
The following adjustments were found necessary at the end of the year:
- The Truck depreciates using units of activity It has a useful life of 5 years, a salvage value of $3000 and estimated 400,000 km to travel. By the end of the year the truck traveled 70,000 km.
- Office supplies on hand are 1,200.
- Interest on the loan is 18% annually and the loan was received November 1st.
- Prepaid insurance was paid on April 1st.
- Unearned revenues that should be realized totaled 2,500.
- Maintenance expenses that the accountant forgot to record totaled 3,000.
- Sales revenues that aren't recorded totaled 1,500.
Required:
Prepare the Income Statement for 2019 and Balance Sheet for December 31, 2019.
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