1 Erika is a sole trader. 2 Erika uses accrual accounting. 3 Erika uses a monthly accounting cycle which produces monthly financial reports. 4 Erika is NOT registered for GST. 5 Inventory is accounted for using a perpetual basis. 6 Hon-current assets are capitalised at purchase, and depreciated using straight line by the number Date Description 5 11'071'2020 The business had the following balances Cash at bank 69, 000. 00 Accounts receivable 24,150. 00 Prepaid Rent 4,150. 00 Inventory 172, 500. 00 Shop Fittings 199, 410. 00 Acc Depreciation - Shop Fittings 39, 882. 00 Accounts Payable 7, 600. 00 Bank Loan 192,000.00 31'071'2020 Customer paid $3, 000 for sales made in the previous month. 41'071'2020 Erika paid Facebook $2,220 for targeted advertising. The ads will run from 10f7f2020 until 10f10f2020 71'071'2020 Cash sales of lawn mowers to customers totaled $5,440. The original cost was $3,260 81'071'2020 Took out a bank loan of $69,700. 91'071'2020 Purchased 41 law'rmowers at $304 each. Erika paid the wholesaler $7,300 as down payment, with the remainder due next month. 11f07f2020 Purchased a deliver van for deliveries worth $69,000 12f07f2020 Paid $5,500 for 12 months of comprehensive insurance on delivery van starting today. 13f07f2020 Paid $10, 350 for safety features and modifications to the delivery van 15f07f2020 Paid employees $2,750 for work done last month. 16f07f2020 Paid $3,220 for wages for work done this month. 17f07f2020 The business paid Erika $1, 288 as the shop manager and business owner. 18f07f2020 Paid $327 internet and telephone bill for this month. 19f07f2020 The City of Monash purchased equipment worth $51, 750. The original cost was $20,700 Erika delivered the equipment and invoiced the City of Monash on the same day. 201'071'2020 Erika bought new mowers and stock for cash. The total was $36,200. 211'071'2020 Erika paid all of the outstanding accounts payable from last month 221'071'2020 The City of Monash booked Erika for two training sessions as one of their staff has already broken a chain saw. Erika immediately invoiced $8,850 for the training, which will be paid in 60 days. 23f07f2020 A corporate customer paid $6,070 cash to have their mowers and eguipment serviced. 24f07f2020 Paid banks fees of $130. 25f07f2020 Erika took home a chainsaw and gave it to her father as a gift. The retail price of the chainsaw was $520 and it originally cost $350. End of Month Adjustments At the end of the mont Erika had to consider the following items for adjustment )1) By the 31 July, Erika had delivered the first training session for the City of Monash with the seco1 B) Depreciation on Delivery van, $827. C) Depreciation on Shop Fittings, $29,910. D) Adjustment to advertising pre-purchase made earlier in the month E) Incurred $5,576 in interest on the loan for the delivery van. This remains unpaid at 31 July. F) The fortnightly pay cycle did not coincide with 31 July. Employees were owed $2,200 at the end of 1 The Burwood Chainsaw and ower Shop Chart of Accounts Account No Account Name 100 Current Assets -01 Cash at bank 102 Accounts receivable 103 Inventory -04 Prepaid Advertising 105 Prepaid Rent 106 Prepaid Insurance 107 Wages paid in advance 150 Non Current Assets -51 Shop Fittings 152 Acc Depreciation Shop Fittings 153 Delivery Van -54 Acc Depreciation Delivery van 200 Current Liabilities 201 Accounts Payable 202 Wages Payable 203 Unearned Revenue 204 Accrued interest 205 Advertising payable 250 Non Current Liabilities 251 Bank Loan 300 Owners Equity 301 Capital Erika Tibisay 302 Drawings Erika Tibisay 400 Income 401 Product Sales 402 Service Revenue 500 Cost of Goods Sold 501 Cost of Goods Sold 600 Expenses 601 Rent Expense 602 Advertising Expense 603 Wage Expense 604 Internet & Telephone Expense 605 Utilities Expense 606 Delivery & Freight Expense 607 Insurance Expense 608 Interest Expense 609 Depreciation Expense Shop Fittings 610 Depreciation Expense Delivery van 611 Bank fees