Embankment Fashions Pty Ltd wishes to determine the entitys net profit for the financial year ending at

30 June 2020. Embankment Fashions provides the following accounts and amounts BEFORE any balance day adjustments listed below are recorded.

Cash Sales $450,000; Credit Sales $300,000; Cost of sales $300,000; Salaries $40,000; Prepaid insurance 8,000; Operating expenses $87,000 and Commission revenue received in advance $22,000

Balance Day adjustments before the determination of Net Profit before 30 June 2020

DR: Salaries expense $3,000

CR: Salaries payable $3,000

DR: Insurance $2,000

CR: Prepaid Insurance $2,000

DR: Commission revenue received in advance $4,000

CR: Commission revenue $4,000

Required:

a) Determine the revenue accounts under the accrual method for profit determination for the period ending 30 June 2020

b) Determine the net profit or loss under the cash method for profit determination for the period ending 30 June 2020