QUESTION 1: Balance Day Adjustments (18 marks) 1. Office Salaries which are payable but have not yet been recorded as at 30 June 2021 are $1,570. Below is the unadjusted Trial Balance as at 30 June 2021 for "Around The Green", a retail business specialising in golfing equipment and apparel. It is owned and operated by Juan Wood. 2. Juan conducted a count of his stationery room on 30 June 2021. This count revealed that office supplies still on hand at that time were $3,474. Away From It All Unadjusted Trial Balance As at 30 June 2021 3. Both the Furniture & Fittings and the Equipment are expected to be used evenly over their useful lives. The expected total useful lives and residual values of both assets is as follows: Credit ($) Debit ($) 35,688 42,500 Estimated Useful life 8 years Furniture & Fittings Equipment Estimated Residual $0 $3,400 10 years 187,200 6,552 4,368 53,040 4. To assist with his businesses cash management, Juan applied to his bank on 14 May 2021 for a bank overdraft facility of $30,000 on his business bank account. The bank approved the overdraft facility on the account on 26 May 2021. 15,912 5. 62,400 On 30 June 2021 Juan reviewed his outstanding Accounts Receivable balance. Based on his previous experience, he has estimated that 2% of this balance is unlikely to be collected. 24,960 36,036 156,000 88,296 6. A specially imported hand-crafted golf driver costing $4,830 was ordered and paid for by a customer on 27 June 2021. At the time of the sale, Juan recorded this amount as Sales Revenue. Juan has received confirmation from the manufacturer that due to manufacturing delays, the driver will not be delivered and available for the customer until at least 25 October 2021. 37,440 Cash at Bank Accounts Receivable Inventory Prepaid Insurance Office Supplies on hand Furniture & Fittings Accumulated Depreciation - Furniture & Fittings Equipment Accumulated Depreciation - Equipment Accounts Payable Loan Payable J. Wood - Capital (1 July 2020) J. Wood - Drawings Sales Revenue Sales Returns and Allowances Cost of Sales Discount received Freight inwards Sales Salary Expense Delivery Expense Advertising Expense Rent Expense Office Salaries Expense Telephone/Internet Expense Electricity Expense Discount Allowed Totals 921,372 7. 13,232 549,744 On 1 November 2020, Juan took out a 2-year insurance policy for his inventory and contents. This policy was paid for from the business bank account on the same day and was recorded as Prepaid Insurance. 17,276 8. Juan's last bill from his telecommunications provider for the business was for the month ending 31 May 2021, and this account was paid in early June. He has not yet received the June account, but has estimated that the cost of his telephone and internet usage up until 30 June 2021 was $1,100. 12,480 91,104 24,336 29,267 38,064 45,000 11,776 6,613 9,048 REQUIRED: It is now the end of the financial year, and based on the information she has provided above, Juan has asked you to prepare any necessary balance day adjusting journals. 1,259,852 1,259,852 Use the General Journal document provided on the following page to record the journal entries required
