Question 4 (46 marks-83 minutes) M MacDonald's, a sole trader extracted the following trial balance from his books at the close of business on 31 October 2015 Capital at 01 Novermber 2014 DrY N (NS Cr (NS) 312 000 Drawi Cash Trade receivables Allowance for receivable at 01 November 2014 Trade payables Building at cost Furniture at cost ngs 16 900 wwwwwww10 000 160000 50 000 125 000 370 000 110 000 Accumulated depreciation 01 November 2014 Buildings AW30 000 Furniture Bank overdraft Revenue Purchases Discount Inventory at 01 November 2014 Returns inwards Returns outwards 55 000 35 000 900 000 570 000 14 000 80 000 8 100 9 300 5 700 Carriage outwards 21 000 162 000 1,522,000 Administrative expenses 1,522,000 The following additional information is also available * The allowance for receivables is to be adjusted to 5% of trade receivables. The allowance for receivables is treated as an administrative expense Furniture is depreciated at 20% per annum using the reducing balance method and buildings are depreciated at 5% per annum on their original cost straight line Depreciation is treated as a cost of sale expense Closing inventory has been counted and is valued at $37 500 An invoice of $7 500 for telephone costs relating to the quarter ended 30 November 2015 was received on 02 December 2015. Telephone costs are included in administrative expenses Required: a) Journalise the adjustments on 31 October 2015 in the books of M MacDonald's. (5 Mark