9(a) Sold flying disc and toy swings to Action Limited, list price of $140,000 with a 20% trade discount, n/20, FOB shipping point. The responsible party paid freight-charges of $500. The shipping document showed that the goods arrived at the warehouse of Action Limited on 12 March. 9(b) Paid Esorbma Limited for the children laptop toys bought on 1 March and the amount of $220,000 on account for the purchase on 27 February 2021. Purchases terms with Esorbma Limited in February was 2/10, n/30, FOB shipping point.
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.
Prepare the Journal
9(a) Sold flying disc and toy swings to Action Limited, list price of $140,000 with a 20% trade discount, n/20, FOB shipping point. The responsible party paid freight-charges of $500. The shipping document showed that the goods arrived at the warehouse of Action Limited on 12 March.
9(b) Paid Esorbma Limited for the children laptop toys bought on 1 March and the amount of $220,000 on account for the purchase on 27 February 2021. Purchases terms with Esorbma Limited in February was 2/10, n/30, FOB shipping point.
10 Paid $180,000 for salary up to 9th March (Tuesday). All employees work a five-day week and are paid every four weeks on the following Wednesday, based on the number of days they have worked in the last four weeks. Employees are entitled to full pay on public holidays but not on Saturday and Sunday. The employees receive a total salary of $45,000 for a five-day work week.
12 Received payments from Vinga Limited, for the March sales.
13 Acquired $160,000 packing equipment by signing a 90-day, 5% notes payable. ITI started to use the equipment in April.
16 Queenie Company Limited, a customer, has financial difficulties and unable to pay the outstanding balance of $220,000. The company has a long-term relationship with Queenie, and agreed to accept a 12%, 45-day notes from the customer to settle the outstanding balance.
17 Share dividends were distributed. Shareholders on the register of the company on 6 March 2021 are entitled to receive the dividend shares.
21 Paid all cash dividends declared previously.
25 Received from Tom Limited, $180,000, as the prepayment for the leasing of part of the warehouse for one year from 1 April 2021 to 31 March 2022.
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