Using the information provided on the following page, prepare:

• General Journal entries for the balance day adjustments
• Income Statement as at 31 March 2020
• Statement of Financial Position and Notes to the Statement of Financial Position as at 31 March 2020 using the templates provided.

WORDWISE TRIAL BALANCE AS AT 31 MARCH 2020
	$		$
Inventory	260,000	Capital	660,000
Accounts receivable	82,700	Bank	15,700
Vehicles	60,000	Mortgage	300,000
Land	200,000	Sales	800,000
Buildings	600,000	Accumulated depreciation
Equipment	100,000	buildings	24,000
Cost of sales	380,000	vehicles	15,000
Insurance	7,000	equipment	20,000
Telephone	12,800	Accounts payable	40,000
Electricity	18,000	GST	1,600
Rates	10,000
Interest on mortgage	21,000
Wages sales staff	30,000
Salaries	90,000
Bad debts	4,800
	$1,876,300		$1,876,300

Additional information

• The mortgage is secured over the business land and buildings with a maturity date of 31 July 2028. The interest rate is 7%

The following adjustments were needed at balance sheet date.

• Additional bad debts of $5,980, including GST, are required to be written off.
• An allowance for doubtful debts is to be created to 2.5% of Accounts receivable.
• Invoices dated 29 March for expenses owing are on hand for telephone $1,380, including GST and electricity $2,024, including GST.
• Wages owing sales staff, $5,000.
• Depreciation is to be provided on:
  • buildings at 2% straight-line
  • vehicles at 20% diminishing value
  • equipment at 10% straight-line.
• Inventory is to be revalued downwards by $10,000 to its net realisable value.

Profit for the year, after adjustments, is $170,322.

WORDWISE GENERAL JOURNAL
Date	Particulars	Debit	Credit
		$	$
2021
Mar 31	Bad debts	5,200
	GST	780
	Accounts receivable		5,980
	(Further bad debts written off at balance day)
	Doubtful debts	1,918.00
	Allowance for doubtful debts		1,918.00
	(To increase allowance for doubtful debts to 2.5%of accounts receivable $76,720 )
	Wages- sales staff	5,000
	Accured expenses		5,000
	(wages owing at balance day)
	Telephone	1200
	GST	180
	Accounts payable		1380
	(Telephone owing at balance sheet date)
	Electricity	1760
	GST	264
	Accounts payable		2024
	(Electricity owing at balance sheet date)
	Write down of inventory	$10,000
	Inventory		$10,000
	(Inventory revalued to net realisable value)