Question

Consider the information provided for Peak Financial Services

Record adjusting entries for the end of June. Include narrations. Construct the “T” formatted ledger accounts. Prepare the profit and loss statement for the year ended 30 June 2020. Prepare the classified narrative formatted balance sheet as at 30 June 2020.

You must use formula to construct the ledger accounts, profit and loss statement, and balance sheet.

                                        PEAK FINANCIAL SERVICES

                             UNADJUSTED TRIAL BALANCE AS AT 31^st MAY 2020

ACCOUNT                                                      DR                            CR

CASH AT BANK                                                                          88,300 –

ACCOUNTS RECEIVABLE 48,300 –

GST RECEIVABLE                                                                     4,380    -

PREPAID RENT                                                                          9,000    -

PREPAID INSURANCE                                                               8,000    -

OFFICE SUPPLIES                                                                     4,700 -

OFFICE EQUIPMENT                                                                 92,400 -

ACCUMULATED DEPRECIATION – OFFICE EQUIPMENT     -                       25,000

ACCOUNTS PAYABLE –                       26,800

UNEARNED FEES –                      12,200

LOAN PAYABLE – DUE 31 DECEMBER 2019                                 –                      25,000

GST PAYABLE    –                       5,980

CAPITAL (A, PEAK) –                      32,000

DRAWINGS (A, PEAK) 12,500 –

FEES REVENUE                                                                          –                         213,700

GAS EXPENSE                                                                             750 -

FUEL EXPENSE                                                                           6,400 -

RENT EXPENSE                                                             30,000 -

SLALARIES EXPENSE    32,800 -

PHONE AND INTERNET EXPENSE 3,150    -

TOTALS                                                                            3,40,680 3,40,680

June transactions

Date                               transaction                                               amount

1/06/2020   cash receipts from customers for money owed $19,800

2/06/2020     purchased a work van paying a 20% cash deposits and taking out a 4-year 6% loan to cover the balance $67,100

5/06/2020 purchased office supplies on credit, due 15 July $2,200

9/06/2020 received a cash deposit upfront from a customer for financial advisory work to be completed during July 2020 $4730

12/06/2020 cash receipts from customers for moneys owed $22,185

15/06/2020 paid all outstanding accounts payable from previous month

22/06/2020 received gas bill $330

24/06/2020 paid June salaries to this date $2,400

26/06/2020 received and paid mobile phone and internet bill for month of June $374

28/06/2020 settled previous month GST with ATO

29/06/2020 cash receipts from customers for moneys owed $3,250

30/06/2020 record all June sales on credit $21,340

30/06/2020    received bank interest $230

30/06/2020 one customer was declared bankrupt during June. Their debt is judged to be non-recoverable (a bad debt). $2,310

Additional Information:

• All sales are credit sales (30 days).
• Unless stated all amounts are GST inclusive or GST exempt.
• Interest expense of $227 has accrued in June on the loans payable
• A physical count of office supplies on 30 June shows $2400 of unused supplies on hand
• Depreciation of the office equipment this year is estimated to be $9,400.
• Depreciation of the motor vehicle will be determined using the straight-line method. The business estimates the useful life of the van to be 5 years, and the residual value to be $16,000. Based on these values, the business estimates annual depreciation on the van to be $9,000 per year.
• Prepaid insurance was paid on the 1st of April 2020 and covered a period of 6 months.
• Prepaid rent balance as at 1 July 2020 should be $2,800.
• Of the unearned fees balance as at 31st May, 60% were refunded to a customer as the business was unable to complete the work prior to 30 June as previously agreed, the remainder of the unearned fees were earned during June.
• Salaries expense accrued for the last week in June amounts to $2,800. Ignore PAYG related to salaries.
• The fuel expense for June of approximately $800 has not been recorded or paid.
• At the end of the month A, Peak withdrew $4,500 for his own use

Answer 1

Answer:-  

Trial Balance as at 30th June
Particulars	As on 31st May		June Transactions		June Transactions		June Transactions		June Transactions		June Transactions		Adjustment		As on 30th June
	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash at Bank	88300		19800	16775	4730	26800	22185	7320	3250	2400	230	374		4500	80326
Account Receivable	48300			19800		2310	21340	22185		3250					22095
GST Receivable	4380			4380											0
Prepaid Rent	9000			6200											2800
Prepaid Insurance	8000			4000											4000
Office Supplies	4700		2200	2400											4500
Office Equipments	92400														92400
Acc Dep- Office Equipment		25000		9400												34400
Accounts Payable		26800		2200	26800	330				800		2800				6130
Unearned Fees		12200				4730	7320		4880							4730
Loan Payable (due 31/12/19)		25000				227										25227
GST Payable		5980	4380													1600
Capital		32000														32000
Drawings	12500												4500		17000
Fee Revenue		213700						21340		4880						239920
Gas Exp	750				330										1080
Fuel Exp	6400								800						7200
Rent Exp	30000		6200												36200
Salary Exp	32800								2400		2800				38000
Phone & Internet Exp	3150										374				3524
6% 4 yr Loan for Work Van				67100										335		67435
Work Van			83875												83875
Bank Interest					227							230	335		332
Bad Debts					2310										2310
Depreciation Exp			9400		750										10150
Inventory - Office Supplies			2400												2400
Accumulated Dep - Work Van						750										750
Insurance Exp			4000												4000
	340680	340680	132255	132255	35147	35147	50845	50845	11330	11330	3404	3404	4835	4835	412192	412192

Profit & Loss Account (year Ended June,30)
Gas Exp	1080	Fee Revenue	239920
Fuel Exp	7200	Bank Interest	230
Rent Exp	36200
Salary Exp	38000
Phone & Internet Exp	3524
Office Supplies	4500
Bank Interest	562
Bad Debts	2310
Depreciation Exp	10150
Insurance Exp	4000
Profit (Gains)	132624
TOTAL	240150	TOTAL	240150

Balance Sheet    (as on June 30)
Capital (Add-Profit & Less Drawings)	147624	Work Van	83875
6% 4 yr Loan for Work Van	67100	Office Equipments	92400
Current Liabilities		Current Assets
Loan Payable (due 31/12/19)	25000	Account Receivable	22095
Interest Payable (227+335)	562	Prepaid Rent	2800
GST Payable	1600	Prepaid Insurance	4000
Accounts Payable	6130	Inventory - Office Supplies	2400
Unearned Fees	4730	Cash at Bank	80326
Accumulated Dep - Work Van	750
Acc Dep- Office Equipment	34400
TOTAL	287896	TOTAL	287896

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