The following purchase transactions occurred during the last few days of Whilczel Company's business year, which ends October 31, or in the first few days after that date. A periodic inventory system is used. · An invoice for P6,000, terms FOB shipping point, was received and entered November 1. The invoice shows that the material was shipped October 29, but the receiving report indicates receipt of goods on November 3. · An invoice for P2,700, terms FOB destination, was received and entered November 2. The receiving report indicates that the goods were received October 29. · An invoice for P3,150, terms, FOB shipping point, was received October 15, but never entered. Attached to it is a receiving report indicating that the goods were received October 18. Across the face of the receiving report is the following notation: "Merchandise not of the same quality as ordered - returned for credit October 19". · An invoice for P3,600 terms FOB shipping point, was received and entered October 27. The receiving report attached to the invoice indicates that the shipment was received October 27 in satisfactory condition. · An invoice for P4,800, terms FOB destination, was received and entered October 28. The receiving report indicates that the merchandise was received November 2. Inventory was determined by physical count on October 31 as P77,500. Required: Compute the correct amount of Inventory on October 31
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.
The following purchase transactions occurred during the last few days of Whilczel Company's business year, which ends October 31, or in the first few days after that date. A periodic inventory system is used.
· An invoice for P6,000, terms FOB shipping point, was received and entered November 1. The invoice shows that the material was shipped October 29, but the receiving report indicates receipt of goods on November 3.
· An invoice for P2,700, terms FOB destination, was received and entered November 2. The receiving report indicates that the goods were received October 29.
· An invoice for P3,150, terms, FOB shipping point, was received October 15, but never entered. Attached to it is a receiving report indicating that the goods were received October 18. Across the face of the receiving report is the following notation: "Merchandise not of the same quality as ordered - returned for credit October 19".
· An invoice for P3,600 terms FOB shipping point, was received and entered October 27. The receiving report attached to the invoice indicates that the shipment was received October 27 in satisfactory condition.
· An invoice for P4,800, terms FOB destination, was received and entered October 28. The receiving report indicates that the merchandise was received November 2.
Inventory was determined by physical count on October 31 as P77,500.
Required: Compute the correct amount of Inventory on October 31
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