You have been employed as an accountant for GMF Mining Group, a small family owned partnership. The following information as at 30 June 2020 (the 2020 period) has been presented to you by Ms Lewis, the only family member who currently works in the business:

-Note the business sells widgets that are exported to mining companies in WA. They buy these widgets from a supplier at cost price in Tasmania and place a 100% mark-up on the goods prior to selling them to their customers.

-Estimated sales revenue for 30 June 2021 is $500,000

The below information relates to the 30 June 2020 period:

-Cash sales for the period is $300,000

-Credit sales for the period were $300,000 however $50,000 worth of widgets was returned back to GMF Mining Group. The accounts receivable for this was taken off the books.

-The business had cash expenses of: electricity $5,000, employee wages $100,000 and miscellaneous expenses $15,000.

-Rent does not need to be paid as the warehouse building and land is owned. The building was constructed exactly 10 years ago for $100,000. Straight line depreciation is applied at an expected useful life of 20 years. The land at the time had a cost price of $200,000 and no revaluations have been completed to date.

-10% interest is applied on a long term bank loan of $200,000. The loan will be paid back in full in 2030. At this stage no tax information has been provided.

Other balances include ($):

Accounts payable 50,000

Inventory 200,000

Capital at 1 July 2019 300,000

Cash on hand 10,000

Drawings 40,000

Accounts receivable 150,000

Required:

1) Prepare a 30 June 2020 balance sheet

2) Prepare a 30 June 2020 income statement