Question 1 (11 marks)

As at 30 June 2022, the unadjusted trial balance of Red Ltd was noted as follows:

Red Ltd

TRIAL BALANCE

AS AT 30 JUNE 2022

Accounts	Debit ($)	Credit ($)
Cash at bank	10 270
Account receivables	31 200
Prepaid insurance	5 000
Office Supplies	4 680
Office equipment	14 250
Accumulated depreciation - equipment		2 850
Accounts payable		2,580
Salary payable
Unearned service revenue		1 500
Loan payable		10 500
Capital		33 300
Drawings	60 000
Service revenue		159 270
Salary expenses	66 000
Depreciation expenses - equipment
Miscellaneous expenses	18 600
TOTAL	210 000	210 000

The following additional information is available at the end of June for adjustments:

• A physical count of office supplies on 30 June shows $500 of unused supplies on hand
• Depreciation of the office equipment is 10% each year (straight line method is used)
• Of the $1500 unearned service revenue, $300 is still unearned
• Of prepaid insurance, 60% expired this period
• Salaries incurred for the month of June which was owed but not yet paid was $2,500
• Provided consultancy service of $7,500 on credit. This was not recorded for the month.