Ledger balances on 30 June 2022 before adjustments were: machinery $50 700, accumulated depreciation – machinery

$12 800, rates $8000, 12% government bonds $25 000, interest received $2850, salaries and wages $58 300, and rent received $16 250.

Adjustments required were as follows.

• Machinery was depreciated at 20% p.a.

• Annual rates of $6700 were paid on 31 March 2022.

• Six-monthly interest on bonds was last received 31 January 2022.

• Salaries and wages accrued $1200.

• Thirteen months’ rent was received for the year at $1250 per month.

a Prepare for the year ended 30 June 2022:

• adjusting journals

• an extract income statement and balance sheet.

Note: The closing journal entries and postings to the general ledger accounts are also provided in the solutions.

b Prepare relevant reversal journals on 1 July 2022 and post to the ledger.