You are part of the accounting team for KARL Ltd, a pet food company based in Sydney. You have been involved in the audit for the year ended 30 June 2021 and have been told that the company has not correctly followed accounting rules in the preparation of the financial statements. Your manager wants you to prepare the journal entries that should be recorded to correct the problems the audit has uncovered. (Note: "correct" here is a verb!) The audit has uncovered the below transactions relating to revenue.

i. One of the cash receipts credited to revenue turned out to be a deposit for $6,000 made by a customer on an order that will be filled a week after the end of the year. (2 marks)

ii. The company purchased a motor vehicle on 1 April 2021. The annual depreciation expense for the vehicle is $3,000. The company did not include the depreciation expense in the financial statements on 30 June 2021. (2 marks)

iii. The company pays annual insurance of $36,000 every year on 1 January. The insurance premium, which has not increased since 2016, covers the period from 1 February to 31 January of the next year. Monthly insurance adjustments to prepaid insurance were recorded in February, March and April but no adjustments have been recorded for May and Junes insurance expenses.

(3 marks) iv. The company prepays rent every three months. The last payment of $24,000 was made on 30 April 2021 for the three-month period starting 1 May 2021. The audit uncovered that the rent prepayment transaction on 30 April was not recorded nor were any monthly rental expense transactions for May or June. (4 marks) v. On 30 June 2021, the balance sheet showed dividends payable of $30,000. Management of KARL Ltd has informed the audit team that dividends payable at this date should total $20,000 following a dividend payment made to shareholders during June for which no transaction has been recorded. The company also received dividends of $15,000 (cash) on 30 June 2021 but this transaction was not recorded in the financial statements. Note: you can assume the dividends received were announced and paid on 30 June 2021 and no prior record of this transaction exists in the financial statements. (4 marks)

vi. Before the above adjustments for KARL Ltd were recorded, the balance sheet showed a cash balance of $175,000 and retained profits of $300,000. You are required to calculate the updated balances for cash and retained profits that would be shown in the financial statements for. You should show all workings. (10 marks

i. One of the cash receipts credited to revenue turned out to be a deposit for $6,000 made by a customer on an order that will be filled a week after the end of the year. (2 marks) Example format: Dr. Account name 100 Cr. Account name 100

ii. The company purchased a motor vehicle on 1 April 2021. The annual depreciation expense for the vehicle is $3,000. The company did not include the depreciation expense in the financial statements on 30 June 2021.