Huonville Pty Ltd is a newly established company specializing in rug trading. Currently, Huonville has two retail shops and one warehouse for storage. The company commences its trading on 1 January 2021 and its first financial year ends on 30 June 2021.

As of 31st May 2021, Huonville’s accounts are as follows:

$	$
Cash at bank	20 000	Account payables	25 000
Inventory	24 000	Mortgage loan	120 000
Account receivables	20 000	Accrued expenses	16 900
Prepaid rent	10 500	Accrued interest	1 600
Land	135 000	Retained profit	15 000
Motor vehicle	20 000	Owner’s capital	89 000
Accumulated Depreciation – MV	(12 000)
Furniture and Fittings	50 000
Total	267 500	Total	267 500

Note:

• Huonville has paid 3 months’ rent in advance from June to August 2021.
• Furniture and Fittings (F&F) have been purchased on 1 April 2021 and no depreciation expense has been recorded. Huonville has the policy to depreciate F&F by reducing the balance method at the rate of 70%. F&F has an estimated useful life of 3 years and a residual value of $3,000
• There are 8 items in inventory purchased at $3,000 each at the end of May. Huonville uses the Perpetual inventory system and FIFO assumption.
• Huonville purchased a lot of land on 1 February 2021 on cash and on the mortgage loan. A mortgage loan has a term of 10 years and an interest rate of 4% p.a paid annually. Interest expense has been recorded up to May.
• Huonville recorded retained profit at the end of the month.

During June, Huonville has the following transaction:

June 2	Purchased 6 rugs at $3 500 each on credit
June 2	Trade in the existing delivery truck (Motor vehicle) for another truck costing $35 000. Huonville received a trade-in of $5 000 and paid the remaining in cash. The truck is to be depreciated using the straight-line method with 3.5 years of useful life with nil residual value.
June 4	Received $15 000 cash from customers. On the same date, Huonville pays to suppliers a total of $10 000 for outstanding payables.
June 10	Sold 10 rugs at $6 000 each and received $15 000 on cash and the remaining on credit with n/30 4/6
June 15	Customer paid in full outstanding amount for the invoice dated June 10
June 18	Received $2 000 deposit for the sale of 6 rugs delivered on 5 July
June 18	Paid wages of $10 000 to employees, out of which $3 000 was for May wages.
June 20	Purchased 10 rugs at $3 200 each. Huonville paid $5 000 on cash; the remaining is on credit
June 22	Sold 7 rugs at $6 200 each on cash.
June 25	Received utility bills of $4 000. Payment is due on 3 July

After recording the above transaction, the following adjustments need to be recorded in the accounting system:

• From June 2021, Huonville decides to use the direct bad debt write-off to account for bad debt expense arising from account receivables of Customer Helen Hail. In June, Huonville estimated that 3% of account receivable was not collectible and must be recognised as a bad debt.
• Recording rental expenses from prepaid rent
• Recording depreciation expense for F&F and Motor Vehicle at the end of the financial year (as of 30 June 2021).
• Recording interest expense for the mortgage loan for June 2021 (interest expense has been recorded up to May)
• Huonville has not recorded the wages expense of $5 000 in June which will be paid on 2 July.
• Land revaluation: After assessing the fair values of the land, Huonville decides to revalue the land to a fair value of $160 000.

Required:

1. Prepare journal entries to record all transactions that occurred during June and the end-of-month adjustments

Post journal entries to related ledger accounts and finalized the ledger account balances at the end of June

Prepare closing entries for June 2021

Prepare a trial balance, balance sheet, and income statement for June 2021.