A new business graduate with one subject of accounting prepared the financial statements below for Helen’s Dancing School at the end of the first year of operations.

Additional analysis revealed the following.

1. Dancing fees of $7500 (owed by customers) were unrecorded at 30 June.

2. Additional equipment of $10 500 purchased with a bank loan at the end of the month had not been recorded.

3. Supplies on hand at 30 June costing $10 600 were included in expenses.

4. Wages of $2500 were payable at 30 June.

Required

(a) Prepare a corrected income statement for the year ended 30 June 2019.

(b) Prepare a corrected balance sheet in narrative form as at 30 June 2019.

(c) Prepare a statement of changes in equity for the year ended 30 June 2019.

(d) Discuss the accounting assumptions that the graduate has breached.

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INCOME Dancing fees EXPENSES Studio rent expense Wages expense Supplies expense Electricity expense H. Horner, Drawings Depreciation expense - vehicle - equipment PROFIT ASSETS Cash at bank Equipment Vehicle HELEN'S DANCING SCHOOL Income Statement for the year ended 30 June 2019 $12600 17 800 20 700 $51 100 Balance Sheet as at 30 June 2019 $18000 43 000 16 200 6750 11 200 3 200 4300 LIABILITIES Accounts payable EQUITY H. Horner, Capital $115 000 102 650 $ 12350 $13.000 38 100 $51 100