Delight Traders, when preparing final account balances at 30 June 2022, has not taken into

account the information described below.

(a) Delight Traders purchased a computer equipment on 1 September 2021 at a cost of

$105,000. It has an estimated residual value of $15,000 at the end of its 5-year life. It

is being depreciated using the straight-line method.

(b) Delight Traders purchased a machine on 1 July 2021 at a cost of $200,000. It has an

estimated residual value of $20,000 and useful life of 4 years. The machine is

depreciated using the reducing balance method at the annual rate of 44%.

(c) At 30 June 2022, before any bad debts written off, the Allowance for Doubtful Debts

account had a balance of $800 Cr and the Accounts Receivable account had a balance

of $30,000 Dr. Bad debts to be written off are $4,000. The Allowance for Doubtful

Debts account is to be raised to 2% of the adjusted Accounts Receivable.

(d) The physical stocktake at 30 June 2022 revealed Inventory on hand to be $970,000.

Inventory at 1 July 2021 is $850,000. During the year purchases were $5,000,000 and

purchases returns $25,000. The business uses the Physical (Periodic) inventory system.