Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue $ 7,000 Operating expenses: $ 3,360 Depreciation expense 240 Insurance expense 100 General and administrative expense 1,000 Total operating expenses 5,000 Income before income taxes 1,500 Income tax expense (600) Net income $ 900 Balance Sheet Information (S in thousands) Dec 31, 2021 Dec 31, 2020 Assets: Cash $ 300 $ 200 Accounts receivable 750 830 Inventory 640 600 Prepaid insurance 50 20 Equipment $ 2,100 $ 1,800 Less: Accumulated depreciation (840) (600) Total assets $ 3,000 $ 2,850 Liabilities and Shareholders’ Equity: Accounts payable 300 360 Accrued liabilities (for general & administrative expense 300 400 Income taxes payable 200 150 Notes payable (due 12/31/2022) 800 600 Common stock 900 800 Retained earnings 500 540 Total liabilities and shareholders’ equity $ 3,000 $ 2,850 Required: Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint. You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) TIGER ENTERPRISES STATEMENT OF CASH FLOWS For the Year Ended Dece
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.
Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises.
TIGER ENTERPRISES
Income Statement
For the Year Ended December 31, 2021
($ in thousands)
Sales revenue $ 7,000
Operating expenses: $ 3,360
Insurance expense 100
General and administrative expense 1,000
Total operating expenses 5,000
Income before income taxes 1,500
Income tax expense (600)
Net income $ 900
Balance Sheet Information (S in thousands) Dec 31, 2021 Dec 31, 2020
Assets:
Cash $ 300 $ 200
Accounts receivable 750 830
Inventory 640 600
Prepaid insurance 50 20
Equipment $ 2,100 $ 1,800
Less:
Total assets $ 3,000 $ 2,850
Liabilities and Shareholders’ Equity:
Accounts payable 300 360
Accrued liabilities (for general & administrative expense 300 400
Income taxes payable 200 150
Notes payable (due 12/31/2022) 800 600
Common stock 900 800
Total liabilities and shareholders’ equity $ 3,000 $ 2,850
Required:
Prepare Tiger’s statement of
TIGER ENTERPRISES
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2021
($ in thousands)
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