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In your role as a Graduate Accountant at Crase & Stone Accounting Services you have been supplied with the following adjusted Trial Balance for Lounge

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In your role as a Graduate Accountant at Crase & Stone Accounting Services you have been supplied with the following adjusted Trial Balance for Lounge Around Furniture Market, prepared at the end of the financial year by the business owner, Chaz Lounge.

REQUIRED:

Using the Trial Balance provided below, prepare the following for the period in question:

a) Fully classified Income Statement[20 marks]
b) Statement of Changes in Equity [4 marks]
c) Fully classified Balance Sheet (Narrative format)[16 marks]

Lounge Around Furniture Market

Adjusted Trial Balance

For the year ended 30 June 2021

Debit ($)

Credit ($)

Cash at Bank

50,600

Accounts Receivable

53,900

Inventory (30 June 2021)

23,056

Allowance for Doubtful Debts

1,100

Prepaid Advertising

1,694

Shop Furniture & Fittings

27,500

Accumulated Depreciation Shop Furniture & Fittings

9,922

Sales Equipment

15,840

Accumulated Depreciation Sales Equipment

5,456

Advertising Payable

4,950

Accounts Payable

17,600

Interest Payable

660

Loan Payable

36,960

C. Lounge - Capital (1 July 2020)

43,835

C. Lounge - Drawings

20,350

Sales

605,209

Sales Returns & Allowances

9,493

Discount Received

3,410

Electricity Expense

1,760

COS

424,831

Depreciation Expense Shop Furniture & Fittings

3,905

Depreciation Expense Sales Equipment

3,168

Freight Inwards

3,102

Rent Expense

32,230

Discount Allowed

4,070

Salaries Expense -Store

36,740

Advertising Expense

616

Interest Expense

517

Doubtful Debts Expense

1,100

Salaries Expense - Admin

14,630

Totals

729,102

729,102

Chaz has provided the following additional information to assist you with your statement preparation:

$6,500 of the Rent expense specifically relates to the administration office. The remainder of this expense relates rent on the store.
20% of the Electricity expense specifically relates to the administration office. The remainder relates to electricity used inrunning the store.
The Loan Payable was taken out over a term of 5 years.
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