Hi, can you help with D6 & 4.2?

thanks

ACCT1101 Tutorial Questions - Week 6 (Tute 5) CHAPTER 4 DISCUSSION QUESTIONS D2. 'Explain why the purchase of supplies is usually recorded in an asset account rather than in an expense account. If supplies were expensed when purchased, which accounts should be debited and which credited at the end of the period in order to reflect the amount of supplies on hand? D6. The owner of a business reviews the income statement prepared by you and asks, 'Why do you report a profit of only $30 000 when cash collections of $100 000 were received and cash payments for the period totalled only $50 000 for expenses?' How would you respond to the owner's question? Exercise 4.2 Cash versus Accrual basis of Accounting At the end of the first year of operations, Arch Etec, owner of Architect Designs, engaged you to prepare yearly financial statements for the year ended 30 June 2019, on both the cash basis and the accrual basis. The following data are a summary of selected transactions that occurred during the year. (Ignore GST.) 1. Fees of $125 000 were collected for services provided during the year. 2. There were $8000 in receivables at 30 June 2019 for services performed on credit. 3. Cash payments of $106 000 were made for salaries, rent, insurance and other expenses incurred during the year. 4. Salaries owing but not yet paid amount to $4000. 5. On 15 June 2019, a client paid $3000 in advance for services to be rendered during the next financial year. 6. Expenses of $6000 were prepaid (not included in the $106 000) at 30 June. Required (a) Calculate profit under both the cash basis and the accrual basis. (b) Indicate how the following items would be reported in the business's balance sheet under the accrual basis: (i) the $8000 receivables (ii) the unpaid salaries of $4000 (iii) the $3000 advance received on 15 June (iv) the cash payment of $6000 for prepaid expenses. Problem 4.16 Adjusting entries (No GST) Hui Yu, lawyer, had the following transactions related to the business during June. Ignore GST. Required (a) Prepare the journal entries to record each transaction and prepare any adjusting entries as at 30 June, the end of the accounting year. Problem 4.21 Adjusting entries, posting to T Accounts, and effect on Profit (No GST) The trial balance of Chelsea Elliott, marketing services provider, at 30 June 2019 was as follows (Ignore GST). Required (a) Using the following information, prepare adjusting entries. Use the accounts shown in the trial balance and these additional accounts: Salaries Payable, Interest Payable, Telephone Account Payable, Depreciation Expense, Office Supplies Expense, Insurance Expense, Interest Expense. (a) Interest expense of $520 has accrued on the loan payable. (b) A physical count of office supplies on 30 June shows $560 of unused supplies on hand. (c) Depreciation of the office equipment this year is estimated to be $1020. (d) Half the amount in the Unearned Fees account had been earned by the end of the year. (e) The amount in the Prepaid Rent account covers this June and the next 2 months. (f) Of prepaid insurance, 80% expired this period. (g) Salaries expense accrued for the last 4 days in June amounts to $1660. (h) The telephone expense for June of $670 has not been recorded or paid. No tax invoice has been issued. (b) Open T accounts for the accounts shown in the trial balance and enter the 30 June balance in each account. Post the adjusting entries to the T accounts. (c) Prepare an adjusted trial balance, an income statement and a statement of financial position. (d) Assuming that adjusting entries 1-8 in requirement (a) were not made, determine what the profit would have been. What is the difference between this figure and the profit derived in requirement (c)