QUESTION 1-Financial Reporting Ash Naylor is the owner of a business. The following trial balance has been prepared at year's end. A BUSINESS-TRIAL BALANCE AS AT 30 JUNE 2019 Debit (S) Credit ($) 6 000 Cash 36 000 Accounts Receivable Inventory (1 July 2018) Prepaid Rent 43 000 1 500 350 Supplies 116 000 Building Accumulated Depreciation-Building 23 200 Equipment 40 000 Accumulated Depreciation-Equipment Accounts Payable 2 000 32 250 Capital (1 July 2018) 175 150 Drawings 12 800 Sales 207 800 Sales Returns & Allowances 2 250 Discount Allowed 400 Purchases 140 200 Discount Received 900 Supplies Expense 800 Freight Inwards 2 150 Freight Outwards 1 180 Wages Expense 24 000 Local Government Rates Expense 820 Insurance Expense 3 500 Advertising Expense 3 750 Rent Expense 6 600 $441 300 $441 300 (continued.... 2 The following additional information is also provided: (1) $280 of the recorded sales represent cash paid by customers in advance to the business, for goods which will not be delivered until August 2019. It is estimated that 3 % of the 30 June 2019 balance of Accounts Receivable will be never be collected from the customers. (2) Both the Building and 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: (3) Estimated Residual Estimated Useful life $5 000 Equipment 5 years Building 20 years The firm's insurance costs $200 per month. The last insurance payment made was for 6 months commencing 1 May 2019. (4) (5) Wages owing but not paid yet and not recorded yet at 30/6 were $670. The rent was paid on 28 June 2019 and was rent for the three months ending 30 September 2019. (6) (7) Upon receipt of the business's bank statement, the owner realised that the business had earned $90 interest on 30 June 2019. This amount was placed directly into the bank account so the cash has been received by the business but the amount has not yet been recorded by the business. Inventory was counted at 30 June 2019 and showed that $46 250 was still on hand. (8) $1 800 for advertising was paid on the 1t of April 2019. The advertising was for a commercial on the radio every month for 9 months starting in April 2019. (9) Total supplies used during the year ending 30 June 2019 was $940. (You need to focus on the total amount that has been used - do the table and the answer is easier to get). (10) REQUIRED: Prepare appropriate journal entries to account for the information above. (20 marks) 3