QUESTION 2: Financial Statement (11 marks) Mr Dinkley owns 'A Page A Day', a well-known and well-stocked bookshop specialising in mystery novels and comic books. He is also a very good friend of Anne Chovi and often refers customers who are holidaying in the Cove to Anne's diving tours. The following Trial Balance for A Page A Day bookshop has been prepared at year end by Mr Dinkley, who likes to keep a hand in the bookkeeping side of the business. A PAGE A DAY TRIAL BALANCE AS AT 30 JUNE 2020 Debit ($) Credit ($) Cash at Bank 15,121 Accrued Rent 400 Allowance for Doubtful Debts 204 Shop Shelving 22,456 Office Operating Expense 17,200 Interest Expense 1,065 Depreciation Exp - Motor vehicle 400 Inventory (1 July 2019) 10,480 Prepaid Insurance 1,518 Freight Inwards Expense 755 Accumulated Depreciation - Shop Shelving 5,800 Discount Received 400 Rent Expense 17,800 Office Furniture and Fittings 6,400 Delivery Expense 360 Accounts Receivable 16,341 Insurance Expense - Office 240 Wages Expense 52,600 Accumulated Depreciation - Motor vehicle 400 Motor Vehicle 8.000 Accounts Payable 3,620 Doubtful Debts Expense 204 Loan (repayable 1 Oct 2027) 9,200 Sales 154,581 Accumulated Depreciation - Office Furniture & Fittings 1,900 Mr Dinkley, Capital (1 July 2019 43,910 Depreciation Exp - Office Furniture & Fittings 640 Mr Dinkley, Drawings 7,200 Advertising Expense 1,815 Sales Returns & Allowances 190 Depreciation Exp - Shop Shelving 1,000 Discount Allowed 230 Purchases 38,400 Totals 220,415 220,415 Mr Dinkley has provided the following additional information to assist you with your statement preparation: The stocktake performed at 30 June 2020 recorded an ending inventory balance of $11,000. The Wages account balance is comprised of $28,930 for Selling & Distribution and $23,670 for Administration. The Rent expense is split 50% for the office premises and 50% for the shop premises. REQUIRED: Using the template provided on the following page, prepare a fully classified Income Statement for the year ending 30 June 2020.A PAGE A DAY INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2020 INCOME Sales $154 581 less Sales Returns & Allowances (190) Discount Allowed 230) less Cost of Soles 154 161 Opening Inventory $10 480 add Purchases 38 400 add Freight Inwards Expense 755 less Discount Received (400) COG Available for sale 49 235 less Closing Inventory [11 000) (38 235) GROSS PROFIT 115 926 Less: EXPENSES Selling & Distribution Depreciation Expense - Motor Vehicle 5400 Rent Expense - Shop Premises 8 900 Delivery Expense 360 Wages Expense - Selling & Distribution 28 930 Advertising Expense 1 815 Depreciation Expense - Shop Shelving 1 000 41 405 Administrative Insurance Expense - Office 240 Office Operating Expense 17 200 Depreciation Expense - Office Furniture & Fittings 640 Wages Expense - Administration 23 670 Rent Expense - Office Premises 8 900 50 650 Financial Interest Expense 1 065 Doubtful Debts Expense 204 1 269 (93 324) PROFIT $22 602