QUESTION 1 - Accrual Accounting News for Views is a business owned and operated by Anne Ohner. The following trial balance has been prepared at year's end. 32 2104 NEWS FOR VIEWS - TRIAL BALANCE AS AT 30 JUNE 2020 Debit (S)e Credit ($) Cash 16 000 Accounts Receivable 38 2006 Inventory (1 July 2019) 43 500 Prepaid Rente 4 000 Prepaid Insurance 1,800 Supplies 5100 Warehouse 160 000 Accumulated Depreciation - Warehouse. 5880 Motor Vehicle 30 000 Equipment 18 000 Assi'd Depreciation - Equipment 4 200 Accounts Payablee Capital (1 July 2019) 228 890 Drawings 12 500 Salese 218 670 Sales Returns & Allowancese 2 2704 Discount Allowed 400 Unearned Income 1 500 Purchases 130 200 Discount Receivede Supplies Expensee 120- Freight Inwards 2 150 Freight Outwards 1 200 Sales Staff Wages Expense- 24 000 Advertising Expense 800 Rent Expensee S492250 S4922504 900 6600 The following additional information is also provided at the 30th of June 2020:- A customer paid $1,500 in advance on the 1st of June 2020 for inventory to be delivered to the customer at a later date. By the 30th of June 2020, $1,200 of the inventory had not been delivered to the customer. The rest of the inventory had been delivered to the customer in June 2020. (2) Upon receipt of the business's bank statement, the owner realised that the business had earned $150 interest for the year ending 30 June 2020. This amount was placed directly into the bank account by the bank so the cash received has not yet been recorded by the business and nothing has recorded by the business relating to the interest. All of the non-current assets are expected to be used evenly over their useful lives. The expected total useful lives and residual values of the non-current assets are as follows: Estimated Useful life Estimated Residual Equipment 6 years $1,500- Warehouse 20 years $5,000 Motor Vehicle 9 years $6,6002 (4) The business paid $1,800 cash for insurance on the 1" of April 2020 for 9 months A check of the records showed that wages were still not paid or recorded at 30th June 2020 for a total of $1,280. A bill for the electricity for $810 was received on the 27 of June 2020 and has not been recorded or paid yet. A bill for the water used by the business was also received on the 25th of June 2020 for $270. The bill for the water was paid using cash on the 26th of June 2020 but nothing has been recorded yet for any of the bills that have been received and paid by the business. Rent was paid on 28 January 2020 and was shop rent for ten months starting the 1s of March 2020.- Sales of $450 made by the business to customers in June 2020 have not yet been recorded and the customers have not paid anything. The customers will pay the $450 in July 2020.- It is estimated that 3% of the 30 June 2020 balance of Accounts Receivable will be never be collected from the customers. A check of supplies on hand at the end of June 2020 showed that a total of $270 of supplies had been used for the period (9) (10) The owner paid $800 cash on the 19th of April for two months' worth of advertising on the radio. The advertising will occur twice, once on the 24th of May and again on the 24th of June 2020. REQUIRED: Prepare the journal entries to account for all of the items above. Cre | | | | 0 0 0 | | a la la anded a Solutions to Test DATE ACCOUNTS QUESTION 1 - Accrual Accounting News for Views is a business owned and operated by Anne Ohner. The following trial balance has been prepared at year's end. 32 2104 NEWS FOR VIEWS - TRIAL BALANCE AS AT 30 JUNE 2020 Debit (S)e Credit ($) Cash 16 000 Accounts Receivable 38 2006 Inventory (1 July 2019) 43 500 Prepaid Rente 4 000 Prepaid Insurance 1,800 Supplies 5100 Warehouse 160 000 Accumulated Depreciation - Warehouse. 5880 Motor Vehicle 30 000 Equipment 18 000 Assi'd Depreciation - Equipment 4 200 Accounts Payablee Capital (1 July 2019) 228 890 Drawings 12 500 Salese 218 670 Sales Returns & Allowancese 2 2704 Discount Allowed 400 Unearned Income 1 500 Purchases 130 200 Discount Receivede Supplies Expensee 120- Freight Inwards 2 150 Freight Outwards 1 200 Sales Staff Wages Expense- 24 000 Advertising Expense 800 Rent Expensee S492250 S4922504 900 6600 The following additional information is also provided at the 30th of June 2020:- A customer paid $1,500 in advance on the 1st of June 2020 for inventory to be delivered to the customer at a later date. By the 30th of June 2020, $1,200 of the inventory had not been delivered to the customer. The rest of the inventory had been delivered to the customer in June 2020. (2) Upon receipt of the business's bank statement, the owner realised that the business had earned $150 interest for the year ending 30 June 2020. This amount was placed directly into the bank account by the bank so the cash received has not yet been recorded by the business and nothing has recorded by the business relating to the interest. All of the non-current assets are expected to be used evenly over their useful lives. The expected total useful lives and residual values of the non-current assets are as follows: Estimated Useful life Estimated Residual Equipment 6 years $1,500- Warehouse 20 years $5,000 Motor Vehicle 9 years $6,6002 (4) The business paid $1,800 cash for insurance on the 1" of April 2020 for 9 months A check of the records showed that wages were still not paid or recorded at 30th June 2020 for a total of $1,280. A bill for the electricity for $810 was received on the 27 of June 2020 and has not been recorded or paid yet. A bill for the water used by the business was also received on the 25th of June 2020 for $270. The bill for the water was paid using cash on the 26th of June 2020 but nothing has been recorded yet for any of the bills that have been received and paid by the business. Rent was paid on 28 January 2020 and was shop rent for ten months starting the 1s of March 2020.- Sales of $450 made by the business to customers in June 2020 have not yet been recorded and the customers have not paid anything. The customers will pay the $450 in July 2020.- It is estimated that 3% of the 30 June 2020 balance of Accounts Receivable will be never be collected from the customers. A check of supplies on hand at the end of June 2020 showed that a total of $270 of supplies had been used for the period (9) (10) The owner paid $800 cash on the 19th of April for two months' worth of advertising on the radio. The advertising will occur twice, once on the 24th of May and again on the 24th of June 2020. REQUIRED: Prepare the journal entries to account for all of the items above. Cre | | | | 0 0 0 | | a la la anded a Solutions to Test DATE ACCOUNTS