Boat Repairs Services Ltd has the following trial balance as at June 20x1:

Boat Repairs Services Ltd’s accountant has identified the following adjustments that must be made:

a A special rain insurance policy costing $800 is still included in the prepaid insurance by error. b Supplies valued by stocktake $900. c Depreciation on the equipment for this year is $9,700. d Five percent of the trade debtors are usually not collected. e Accrued salaries incurred but not yet paid are $900. f Interest owing but unpaid on the loan is $200.

Required Prepare a profit and loss statement and balance sheet. Record the adjusting entries in the general journal.

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5 Cash Trade debtors 4,300 9,200 Prepaid insurance 3,500 Supplies 1,700 Plant and equipment 68,700 Accumulated depreciation: 12,700 Equipment 8,250 Trade creditors 16,500 Loan 64,700 Dell Hewllet, capital 6,700 Dell Hewllet, drawings 84,500 Service revenue 52,500 Salaries expense 17,450 Promotions expense 9,600 Rent expense 10,600 Advertising expense 2,400 186,650 186,650