The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended December 31. a. Amalgamate d sold merchandise to American Fashions at a selling price of $230,000. The merchandise had cost Amalgamated $175,000. b. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $15,270. C. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed. 2. Prepare the journal entries American Fashions would record. TIP: The selling price charged by the seller is the purchaser's cost. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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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The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated
is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from
Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems.
Assume the following transactions between the two companies occurred in the order listed during the year ended
December 31.
1.66
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a. Amalgamated sold merchandise to American Fashions at a selling price of $230,000. The merchandise had cost
Amalgamated $175,000.
b. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 and
complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had
ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American
Fashions had cost Amalgamated $15,270.
c. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed.
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2. Prepare the journal entries American Fashions would record. TIP: The selling price charged by the seller is the purchaser's cost. (If
no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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Journal entry worksheet
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