Fashionista Ltd is located near the Southworld Shopping Centre. At the end of the entity’s financial year on 30 June 2017, the following accounts appeared in its adjusted trial balance.

Additional facts:

1. Inventory on 30 June 2016 is $117 000.

2. Note that Fashionista Ltd uses a periodic system.

3. The income tax rate is 30%.

Required

(a) Prepare a fully classified statement of profit or loss for the year ended 30 June 2017.

(b) If you are not told that a particular company employs the periodic or the perpetual inventory method to account for its inventories, what accounts in the trial balance indicate which system is in use? Use the trial balance provided in this question as a starting point, and provide examples to support your discussion. 

Transcribed Image Text:

Accounts Payable Accounts Receivable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Building Cash Depreciation Expense-Building Depreciation Expense-Equipment Equipment Freight-in Insurance Expense Inventory Mortgage Payable Office Salaries Expense Prepaid Insurance Rates and Taxes Payable Purchases Discount Received Purchase Returns and Allowances Sales Salaries Expense Sales $ 139 308 78 468 81900 66924 296 400 35 880 16224 20748 171 600 8736 11 232 63 180 124 800 49 920 3744 7488 689 520 18720 9984 118 560 1 120 080