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The following trial balance was extracted from the books of Paloma & Leo Enterprise, a merchandising business, at June 30, the end of the company's fiscal year. The principal owner of the business is Paloma Rankine and is in the business of selling household items. Paloma & Leo Enterprise Trial Balance as at June 30, 2020 Cr $ Dr $ 161,500 219,000 11,500 186,000 41,000 84,000 800,000 280,000 450,000 234,000 Cash Accounts Receivable Allowance for Bad-Debts Merchandise Inventory Stationery & Supplies Prepaid Rent Furniture & Fixtures Accumulated Depreciation: Furniture & Fixtures Computer Equipment Accumulated Depreciation: Computer Equipment Accounts Payable Salaries Payable Interest Payable Unearned Sales Revenue Note Payable, Long-Term Paloma Rankine, Capital Paloma Rankine, Withdrawals Sales Revenue Earned Sales Discount Sales Returns & Allowances Cost of Goods Sold Salaries Expense Rent Expense Utilities Expense Depreciation Expense - Furniture & Fixtures Depreciation Expense - Computer Equipment Stationery & Supplies Expense Bad-Debt Expense Interest Expense Total 13,500 89,000 360,000 832,500 120,000 1,017,000 3,800 5,200 400,000 161,000 140,000 52,500 13.500 2.837,500 2.837.500 The following additional information is available at June 30, 2020: (0) Stationery & Supplies on hand at June 30, 2020 amounted to $15.000 Rent of $84,000 was paid on May 1, 2020 for the 6-months to October 31, 2020. (iii) The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the fixed-instalment method down to a residual value of $160,000. (iv) The computer equipment was acquired on April 1, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000 Salaries earned by employees not yet paid amounted to $11,000 at June 30, 2020. (vi) The long-term note payable bears interest of 5% per annum. The unadjusted Interest Expense account equals to the amount accrued for the first three quarters of the 2020 fiscal year. The accrued interest for the last quarter has neither been paid nor recorded (vii) A long-standing client to whom merchandise amounting to $28,500 was sold on account on June 25, 2020 was neither recorded nor posted. (viii) Merchandise costing $9,000 was sent to a customer on a sale or return basis. One third of this amount remained unsold at June 30, 2020. Paloma & Leo uses a mark- up of 33%% on costs. (ix) At June 30, 2020. $54.000 of the previously uneared sales revenue had been earned (x) The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad-Debts should be $18,500. (xi) After making all other adjustments, a physical count of inventory was done, which revealed that there was $184,000 worth of inventory on hand at June 30, 2020. Other data: (xii) The business is expected to make principal payments totalling $72,000 toward the note payable during the fiscal year to June 30, 2021. b) Required: a) Prepare the necessary adjusting journal entries on June 30, 2020. [Narrations are not required) b Prepare Paloma & Leo Enterprise multiple-step income statement for the year ended June 30, 2020. c) Prepare Paloma & Leo Enterprise statement of owner's equity for the year ended June 30, 2020 d) Prepare Paloma & Leo Enterprise classified balance sheet, in report format, at June 30, 2020 c)
