QUESTION - Financial Reporting (Adjusting entries) A BUSINESS-TRIAL BALANCE AS AT 30 JUNE 2020 Credit ($) Debit ($) 6 000 13 500 43 000 4 000 800 2 600 1 100 10 350 132 000 25 200 36 000 1 500 Cash Accounts Receivable Inventory (1 July 2019) Prepaid Rent Prepaid Insurance Prepaid Advertising Supplies Motor Vehicle Building Accum. Depreciation - Building Equipment Accum. Depreciation - Equipment Accounts Payable Capital (1/7/19) Drawings Sales Income Unearned Income Purchases Discount Received Salaries Expense Freight Inwards Freight Outwards Sales Staff Wages Expense Local Government Rates Expense Advertising Expense Rent Expense 32 250 193 350 12 800 207550 1 300 140 200 900 21 200 2 150 1 180 24 000 820 3750 6 600 $462 050 $462 050 Anne Ohner is the owner of a business. The trial balance on the previous page has been prepared at year's end. The following additional information is also provided: (1) The business received $1,300 cash in advance for sales made to customers. By the 30th of June $600 of the sale had been delivered to the customer and the rest will be delivered to the customer in July 2020. It is estimated that 2% of the 30 June 2020 balance of Accounts Receivable will be never be collected from the customers. (2) (3) All the assets are expected to be used evenly over their useful lives. The expected total useful lives and residual values of the assets are as follows: 5 years 30 years (4) Estimated Useful Estimated life Residual Motor Vehicle 4 years $350 Equipment $5 000 Building $0 The firm's insurance costs $200 per month. The last insurance payment made was for cash for 4 months commencing 1 June 2020. (5) General Wages owing but not paid as at balance day equals $530. (6) The rent was paid on 1 of February 2020 and was shop rent for the 8 months starting from the 1" of February. (7) Upon receipt of the business's bank statement, Anne realised that the business had earned $90 interest for the period. Nothing has been recorded yet by the business and the cash has not been received yet by the business. (8) Sales were made to customers on the 27 of June on credit worth $3,000. Nothing has been recorded yet for these sales to the customers. (9) $2,600 was paid using cash for advertising on the 30 of April 2020. The advertising was for a commercial on the radio every month for 5 months starting in May 2020. (10) Total supplies used during the year ending 30 June 2020 was $630. REQUIRED: Prepare appropriate journal entries to account for the information above
