QUESTION 1: Balance Day Adjustments (20 marks) Anne Chovi is the sole proprietor of Scooba Dive Inc located in a popular beachside location referred to as 'The Cove'. Anne has been successfully operating her environmentally friendly Scuba Diving gear business for the last ten years. The business primarily stocks goggles and facemasks, wetsuits, scuba tanks and other assorted diving gear. Anne also runs diving courses to promote the beauty of the reef and the continued need to look after the marine environment. Anne is so busy with the management of the business and running the diving courses that she was unable to attend to the bookkeeping, so she hired Jones & Co Accounting Specialists Pty Ltd to take over the accounting function. You are the graduate accountant working at Jones & Co Accounting Specialists Pty Ltd and are now responsible for preparing the year-end Balance Day Adjustment journals for Scooba Dive Inc. Scooba Dive Inc. Unadjusted Trial Balance As at 30 June 2020 Debit ($) Credit ($) Cash 4.800 Accounts Receivable 28,800 Inventory (1 July 2019) 400 Prepaid Rent 1,440 Scuba tanks 12,800 Accumulated Depreciation - Scuba tanks 2,580 Office & Shop Equipment 3,200 Accumulated Depreciation - Office and Shop Equipment 1,580 Accounts Payable 25,800 A Chovi, Capital (1 July 2019) 16,400 A Chovi, Drawings 10,000 Sales 166,240 Sales Returns & Allowances 1,800 Discount Allowed 320 Purchase 112,160 Interest Revenue 720 Electricity Expense 1,720 Water Expense 360 Sales Staff Wages 16,000 Local Government Rates Expense 640 Insurance Expense 4,800 Advertising Expense 3,000 Rent Expense 6,480 Totals 243,320 243,320 On the following page is additional information that Anne has provided to you in relation to the year ended 30 June 2020.ii] iii} iv} vii] viii] A physical stocktake of inventoryat 30th June 2020 revealed $44,320 on hand. 55.200 of the recorded sales represents receipts for scuba tanks which will not be delivered until 2th July 2020. The prepaid rent was paid on 1 June 2020 and was Shopfol'fice rent for two months ending 31 July 2020. Upon receipt of the business's bank statement, Anne realised that the business bank account had earned 512 interest on 30 June 2020 which had been directly paid into the bank account by the bank on that day. The accounting records need to be updated for this transaction. It is estimated that 2% of the 30 June 2020 balance of Accounts Receivable is unlikely to be received. Anne had relied on word of mouth to promote her business to date however Anne decided to advertise her business and products in a popular lifestyle magazine. Anne paid $3,000 at the end of February for the advertising campaign to commence on the 1" of March 2020 for a six-month period. Sales staff wages owing but not paid as at balance day equal $1,334. Both the Scuba tanks and Ofce 8: Shop Eduiprnent are expected to be used evenly over their useful lives. The expected total useful lives and residual values of both assets are as follows: m