$400 000 Discounts provided during the year to customers for early payment $10 000 Doubtful debts expense for the year $5 000 Opening balance of accounts receivable $90 000 Closing balance of accounts receivable $80 000 Opening balance of the provision for doubtful debts $9 000 Closing balance of the provision for doubtful debts $8 000 Cost of goods sold for the year $60 000
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.
You are provided with the following information:
Sales for the year $400 000
Discounts provided during the year to customers for early payment $10 000
Doubtful debts expense for the year $5 000
Opening balance of accounts receivable $90 000
Closing balance of accounts receivable $80 000
Opening balance of the provision for doubtful debts $9 000
Closing balance of the provision for doubtful debts $8 000
Cost of goods sold for the year $60 000
Purchases for the year (on credit terms) $80 000
Discounts received for early payment to suppliers $2 000
Stock write-offs owing to water damage caused by melting ice in
the Antarctic
$5 000
HI5020 Corporate Accounting Tutorial Assignment T1 2021 Page 3 of 5
Opening
Closing balance of trade creditors $35 000
Opening balance of inventory $10 000
Closing balance of inventory $25 000
Required:
(a) Calculate the cash receipts from customers during the year. (3.5 marks)
(b) Calculate the cash payments to suppliers during the year. (3.5 marks)
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