Debit Credit a Cash Accounts receivable, net Inventory Property, plant, and equipment Accumulated depreciation Accounts payable Income taxes payable Notes payable Common stock ($1 par value) Additional paid-in capital Retained earnings, January 1, 2019 Sales-regular Sales-AL Division Cost of sales-regular Cost of sales-AL Division Administrative expenses-regular Administrative expenses-AL Division Interest expense-regular Interest expense-AL Division Loss on sale of AL Division Gain on sale of land 2$ 500,000 1,500,000 2,500,000 15,100,000 $ 4,900,000 2,200,000 200,000 1,000,000 1,000,000 5,800,000 3,000,000 10,100,000 2,000,000 6,200,000 900,000 2,000,000 300,000 210,000 140,000 250,000 300,000 900,000 $30,500,000 $30,500,000 Income tax expense Other financial data for the year ended December 31, 2019: Federal Income Taxes Paid with federal income tax return Accrued Total income tax expense (estimated) Tax rate on all types of taxable income $700,000 200,000 $900,000 40% Discontinued Operations On September 30, 2019, Woodbine sold its Auto Leasing (AL) Division for $4,000,000. The book value of this division was $4,250,000 at that date. For finan- cial statement purposes, this sale was considered as a discontinued operation of a component of the company. Capital Structure Common stock, par value $1 per share. Number of shares outstanding during all of 2019 1,000,000
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.
The following items were derived from Woodbine Circle Corporation’s adjusted
Using the multiple-step format, prepare a formal income statement for Woodbine for the year ended December 31, 2019, together with the appropriate supporting schedules. All income taxes should be appropriately shown.
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