On December 24, 2021, a fire destroyed totally the raw materials bodegaof Sana’a Manufacturing Company. There was no purchase of raw materials fromthe time of thefire until December 31, 2021: 1/1/2021 12/31/2021 Raw materials P 90,000 ? Factory supplies 6,000 P 5,000 Goods in process 185,000 210,000 Finished goods 220,000 225,000 The accounting records show the following data: Sales P 1,200,000 Purchases of raw materials 400,000 Purchases of factory supplies 30,000 Freight in on raw materials 15,000 Direct labor 220,000 Manufacturing overhead 75% of direct labor Gross profit rate 35% of sales The cost of raw materials destroyed by fire was:
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.
PROBLEM 22: On December 24, 2021, a fire destroyed totally the raw materials bodegaof Sana’a Manufacturing Company. There was no purchase of raw materials fromthe time of thefire until December 31, 2021:
1/1/2021 12/31/2021
Raw materials P 90,000 ?
Factory supplies 6,000 P 5,000
Goods in process 185,000 210,000
Finished goods 220,000 225,000
The accounting records show the following data:
Sales P 1,200,000
Purchases of raw materials 400,000
Purchases of factory supplies 30,000
Freight in on raw materials 15,000
Direct labor 220,000
Manufacturing overhead 75% of direct labor
Gross profit rate 35% of sales
- The cost of raw materials destroyed by fire was:
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