Question

Question 2 - Financial Reporting Escape from LA is a business selling electrical goods owned and operated by Kurt Russell. The following adjusted trial balance has been prepared at year's end. Please see next page for requirements for this question. Credit (5) 17 800 337 800 ESCAPE FROM LA-TRIAL BALANCE AS AT 30 JUNE 2019 Debit (5) Cash 32 600 Accounts Receivable 26 900 Doubtful Debts Expense 1 700 Inventory (1 July 2018) 43 100 Rent Expense 1 800 Interest Expense 1500 Telephone Expense 970 Wages Expense 19 500 Accumulated Depreciation - Equipment Freight In Expense General Expense 17 820 Capital (1 July 2018) Drawings 17500 Sales Income Sales Returns 22 450 Discount Allowed 7450 Purchases 157 200 Purchases Returns Discount Received Freight Out Expense 2 150 Accounts Payable Equipment 145 000 Electricity Expense 2 840 Depreciation Expense - Equipment 2 800 Loan Payable Allowance for Doubtful Debts Salaries Expense 37 720 Advertising Expense 4 750 Prepaid Rent 6.950 5 200 1940 26 200 48 500 1 700 Closing Inventory at 30/6/19 was S52 700

Answer 1

Escape from LA Statement of Income Trial Balance For the period ending 30.6.2019 For the period ending 30.6.2019 Debit in $ Credit in $ Sales Income Particulars 337800 Sales Returns Cash -22450 32600 Discount allowed -7450 Accounts Receivable 26900 Net Sales Allowance for Doubtful Debts 1700 307900 Inventory ( 1.7.2018) 43100 Cost of goods sold: Prepaid Rent 6950 Inventory ( 1.7.2018) 145000 43100 Equipment Purchases Accum. Depre - Equipment 15720 Accounts Payable Purchase Returns -5200 26200 Loan Payable Discount Received -1940 48500 Capital ( 1.7.2018) Freight in Expense 4340 117900 Inventory ( 30.6.2019) 17500 -52700 144800 Drawings Gross Margin Sales Income 163100 337800 Sales Returns 22450 Discount allowed 7450 Operating Expense: Purchases Freight out expense Doubtful debts expense 157200 2150 Purchase Returns 1700 5200 Discount Received Rent Expense 1800 1940 Freight out expense Telephone Expense 970 2150 Doubtful debts expense 19500 Wages Expense 1700 General Expense Rent Expense 1800 17820 Electricity Expense Telephone Expense 2840 970 Depreciation Expense - Equip 2800 Wages Expense 19500 Salaries Expense Freight in Expense 37720 4340 General Expense Advertising Expense 17820 4750 92050 Operating Income Electricity Expense 71050 2840 2800 Non Operating Items: Depreciation Expense - Equip Interest Expense Salaries Expense -1500 37720 69550 Advertising Expense Net Income 4750 Interest Expense 1500 Statement of Changes in Capital Totals 557040 557040 For the period ending 30.6.2019 Capital ( 1.7.2018) 117900 Net Income 69550 187450 Drawings -17500 Capital (30.6.2019) 169950

Balance sheet As at 30.6.2019 Amounts in $ Amounts in $ Amounts in $ Amounts in $ Liabilities Assets Current Assets Current Liabilities Cash 32600 Accounts Payable 26200 Accounts Receivable 26900 Allowance for Doubtful Debts -1700 Non Current Liabilities Inventory ( 30.6.2019) Loan Payable 52700 48500 Prepaid Rent 6950 117450 Non Current Assets Owner's Equity Equipment 145000 Accum. Depre - Equipment 127200 Capital (30.6.2019) -17800 169950 244650 Total Liabilities & Equity Total Assets 244650