. You have been assigned to assist in the preparation of the financial statements of Goonvrea Limited for the year ended 31 March 20-6 The trial balance of the company as at 31 March 20-6 is set out below . Share capital Interest pakd Trade and other receivables Dividends paid Long-term bank loan Distribution costs Administrative expenses Sales Retained eamings at 1 April 20-5 Cash and cash equivalents Accruals Prepayments Share premium Land-cost Buildings-cost Plant and equipment-cost Goonvres Limited Trial balance as at 31 March 20-6 Buildings-accumulated depreciation Plant and equipment - accumulated depreciation Inventories at 1 April 20-5 Trade and other payables Purchases REQUIRED Debit 0000 86 1,945 300 1,075 3.519 236 68 2,500 1,010 3.600 1,422 6417 22,178 Credit 1000 4,000 1,750 11.473 546 47 1,000 335 1,520 Further information: The inventories at the close of business on 31 March 20-6 cost £1,539,000. The corporation tax charge for the year has been calculated as £80,000. The land has been revalued by professional valuers at £2,750,000. The revaluation is to be included in the financial statements for the year ended 31 March 20-6. All of the operations are continuing operations. 1,507 22,178 (a) Draft the statement of comprehensive income for Goonvrea Ltd for the year ended 31 March 20-6.
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.
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