Gary Lief owns and operates a successful tour business specialising in camping and adventure holidays. The business also sells a tent that is made only for The Treetop Tourist Company that has recently featured in a number of camping / holiday magazines. As a result of the recent positive media coverage of the excellent Treetop Tourist Company tent and holiday packages, Gary is too busy to undertake any record keeping for the company and has handed the record keeping over to the accounting practice where you work as a graduate accountant. 

30 June 2018

Cash 10,200

Accounts Receivable 61,200

Inventory (1 July 2017) 73,100

Prepaid Rent 3,060

Warehouse Shelving 27,200

Accumulated Dep'n Warehouse Shelv. 5,440

Camping Equipment 6,800

Acc'd Depreciation Equipment. 3,400

Accounts Payable 54,825

G Lief, Capital (1 July 2017) 98,600

G Leif, Drawings 21,250

Sales 353,260

Sales Returns & Allowances 3,825

Discount Allowed 680

Purchases 238,340

Interest 1,530

Electricity Expense 3,655

Water Expense 2,040

Tour Guide Wages Expense 40,800

Local Government Rates Expense 1,360

Insurance Expense 5,950

Advertising Expense 6,375

Rent Expense 11,220

517,055 517,055

Gary has emailed you the following list of account information related to the year ended 30 June 2018:

REQUIRED:

It is now the end of the financial year and Gary requires you to undertake the following:

Prepare the Balance Day Adjustment Journals for The Treetop Tourist Company where required, in the proforma provided on the next page. Include narration (explanation) for each journal entry.

Both the Warehouse Shelving and Camping Equipment are expected to be usedevenly over their useful lives. The expected total useful lives and residual values of both assets is as follows: Useful life Residual Value Camping Equipment 4 years - Warehouse Shelving 10 years $1 000 ii) vi) vii) viii) $7,250 of the recorded sales represents payments for goods which will not bedelivered until September 2018. Tour Guide wages owing but not paid as at balance day equals $1,525. The prepaid rent was paid on 1 June 2018 and was Warehouse/Office rent for thefour months ending 30 September 2018. It is estimated that 2.5% of the 30 June 2018 balance of Accounts Receivable isunlikely to be received. Upon receipt of the business's bank statement, Gary realised that the business hadearned $103 interest on 30 June 2018. This amount was placed directly into the bankaccount. The accounting records need to be updated for this transaction. The ?rm's insurance costs $1,190 per month. The last insurance payment made wasfor 5 months commencing 1 May 2018. A physical stocktake of inventory at 30 June 2018 revealed $46 250 on hand.