Ronald Smith sells computers. The name of the business is Delta Computer. The unadjusted and adjusted trial balances of Delta Computer are given below:

Delta Computer

June 30 2019

Unadjusted Trial Balance

Adjustments

Adjusted Trial Balance

Account Name

Dr

Cr

Dr

Cr

Dr

Cr

Cash at Bank

39,000

39,000

Accounts Receivable

10,000

10,000

Inventory

19,600

19,600

Office Supplies

3,200

1,280

Motor Vehicle

20,000

20,000

Accumulated Depreciation - MV

6,000

8,000

Accounts Payable

1,050

1,050

Bank Loan

45,000

45,000

Ronald Smith, Capital

29,500

29,500

Ronald Smith, Drawings

6,000

6,000

Sales Revenue

60,950

59,650

Sales Returns and Allowances

2,900

2,900

Purchases

24,500

24,500

Purchase Returns and Allowances

2,500

2,500

Salaries Expense

12,000

12,000

Rent Expense

6,000

6,000

Interest Expense

1,800

2,700

Unearned Revenue

1,300

Interest Payable

900

Office Supplies Expense

1,920

Depreciation Expense

2,000

Total

145,000

145,000

147,900

147,900

2.5 (marks)

2.5 (marks)

The end of year stock take show an inventory balance of $11,320 (closing inventory) at 30th June 2019.

Requirements:

(a)Complete the adjustment columns of the worksheet. (5 marks)

(b)Which inventory system (perpetual or periodic) does Delta Computer follow? (3 marks )

(c)Adjusting Entries (8 marks for entries and 1 mark for date)

GENERAL JOURNAL

Date

Details

Debit $

Credit $

(d) Closing Entries (17 marks for entries and1 mark for date)

GENERAL JOURNAL

Date

Details

Debit $

Credit $

(e) Income Statement (18 for completing income statement and 2 marks for date)

Delta Computer

Income Statement

..........................................

$

$

Income:

Sales Revenue

Less: Sales Returns and Allowance

Net Sales

Cost of Goods Sold:

Opening Inventory

Purchases

Less: Purchase Returnsand Allowance

Net Purchases

Cost of Goods Available for Sale

Less: Ending Inventory

Cost of Goods Sold

Gross Profit

Operating Expenses:

Salary Expense

Rent Expense

Office Supplies Expense

Depreciation Expense

Interest Expense

Net Profit