Below is the Trial balance of Miss Piggy & Kermit Inc. after his first year’s trading: Miss Piggy & Kermit Inc Trial Balance as at 30 June 20X8 Dr Cr $ $ Revenue 99,082 Purchases 71,409 Rent 2,000 Printing and stationery 562 Electricity 1,266 Wages 9,492 Insurance 605 Premises 145,000 Computer equipment 8,000 Trade receivables 9,498 Other operating expenses 1,518 Trade payables 3,618 Cash at bank 6,541 Drawings 12,200 Motor vehicle 16,500 Motor expenses 3,109 Capital 185,000 287,700 287,700 Inventory at 30 June 20X8 was valued at $11,498. Prepare the income statement for the year ended 30 June 20X8.
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.
Below is the
Miss Piggy & Kermit Inc
Trial Balance as at 30 June 20X8
Dr Cr
$ $
Revenue 99,082
Purchases 71,409
Rent 2,000
Printing and stationery 562
Electricity 1,266
Wages 9,492
Insurance 605
Premises 145,000
Computer equipment 8,000
Trade receivables 9,498
Other operating expenses 1,518
Trade payables 3,618
Cash at bank 6,541
Drawings 12,200
Motor vehicle 16,500
Motor expenses 3,109
Capital 185,000
287,700 287,700
Inventory at 30 June 20X8 was valued at $11,498.
Prepare the income statement for the year ended 30 June 20X8.
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