Part 1 (EXCEL application Questions):

Laroche Cleaning Services commenced operations on 1 July 2021. The unadjusted trial balance columns of the worksheet for Laroche Cleaning Services are as follows.

Laroche Cleaning Services
Unadjusted Trial Balance
as at 31 July 2021
	Balance
	Debit	Credit
Account title
Cash at bank	$24,100
Supplies	$2,400
Prepaid insurance	$3,600
Equipment	$4,800
Motor vehicles	$18,000
Bank loan		$20,000
Accounts payable		$400
Unearned service revenue		$5,500
Laroche, Capital		$30,000
Service revenue		$500
Wages expense	$1,600
Interest expense	$300
Advertising expense	$1,600
TOTAL	$56,400	$56,400

Additional information as at 31 July 2021:

1. Laroche Cleaning Services owes wages of $2,200 to employees, for services to 31 July.
2. Laroche Cleaning Services has invoiced a number of customers for cleanings services provided during July and needs to accrue service revenue of $12,600.
3. Accrued expenses as at 31 July include: fuel ($190) and telephone ($100) for the month of July.
4. Supplies on hand at 31 July 2018 amount to $2,100.
5. Laroche Cleaning Services provided cleaning services to ABC Public School on 31 July 2021, earning $500 of the $5,500 that was paid to Flash Cleaning Services on 31 July 2021.
6. 1 July 2021 Laroche Cleaning Services purchased a motor vehicle a van that will be used for the cleaning business. The motor vehicle cost $15,000, and the motor vehicle has an estimated useful life of six years.
7. 1 July 2021 Laroche Cleaning Services paid $3,600 for insurance for the period 1 July 2021 30 June 2022.

Required:

1. Prepare and journalise all of the adjusting entries for Laroche Cleaning Services as at 31 July 2021. (15 marks)

2. Using your Unadjusted Trial Balance and adjusting entries prepared above, prepare the ten-column worksheet in Excel for the month ended 31 July 2021 (refer to page 162 174 of the prescribed text for an example of worksheet and financial statements). In the spreadsheet, you are required to have a data section separated from the worksheet section. Use formulas to generate all of the figures in the worksheet from the data section. Use the IF function for the Profit or Loss and also to check that the debit and credit columns balance. (20 marks)

3. Using the ten-column worksheet prepared above as your data, prepare the income statement, statement of changes in equity and classified balance sheet in Excel in a separate page. Use formulas to generate all of the figures in the financial statement reports. (14 marks)

4. Calculate and evaluate the businesss current ratio and debt ratio. If Laroche Cleaning Services repays the bank loan, how would these ratios change? Do you recommend that the bank loan is repaid? Why or why not. (10 marks)