Brighton Ltd has unadjusted trial balance as follows on 30 June 2020. Debit Credit Cash at...

Brighton Ltd has unadjusted trial balance as follows on 30 June 2020.

	Debit	Credit

Cash at bank	20,820
Accounts receivable	6,800
Prepaid insurance	5,200
Office supplies	1,200
Motor vehicles	108,000
Accumulated depreciation – Motor vehicles		45,000
Equipment	2,850
Accumulated depreciation – Equipment		1,120
Accounts payable		7,900
Bank loan		42,100
Unearned rental revenue		1,150
Capital		45,600
Drawings	13,100
Rental revenue		55,200
Salaries expense	24,200
Repairs and maintenance expense	4,100
Office supplies expense	9,900
Electricity expense	1,900
Totals	198,070	198,070

Additional information:

Depreciation on the motor vehicles is on the straight-line method with a useful life of 12 years and scrap value of $4,800.
Depreciation on the equipment is on the reducing-balance method with a depreciation rate of 20% and scrap value of $300.
Expired insurance amounted to $4,500.
A physical stocktake has determined that office supplies on hand amounted to $700.
The balance in the unearned rental revenue account includes $350 for services provided on 25 June 2020.
Salaries earned but not paid amounted to $2,500.
Accrued interest on the bank loan is $4,100.
Electricity expense for June of $275 has not been paid for or recorded at 30 June 2020.

Required:

(a) Prepare the necessary adjusting entries in the general journal for the year ended 30 June 2020. Narrations are not required.

(b) Prepare an income statement for the year ended 30 June 2020.

*Please upload the solution as soon as you can finish it. Thanks for your help

Expert Solution

(a)

No.	Date	Account Titles and Explanation	Debit	Credit
1	June 30, 2020	Depreciation expense [($108000 - $4800)/12]	8600
		Accumulated depreciation-motor vehicles		8600

2	June 30, 2020	Depreciation expense [($2850 - $1120 - 300) x 20%]	286
		Accumulated depreciation-equipment		286

3	June 30, 2020	Insurance expense	4500
		Prepaid insurance		4500

4	June 30, 2020	Office supplies expense ($1200 - $700)	500
		Office supplies		500

5	June 30, 2020	Unearned rental revenue	350
		Rental revenue		350

6	June 30, 2020	Salaries expense	2500
		Salaries payable		2500

7	June 30, 2020	Interest expense	4100
		Interest payable		4100

8	June 30, 2020	Electricity expense	275
		Accounts payable		275

Note: Depreciation expense has been considered for the entire year since no other specific details have been provided. For any clarifications you may write under the comments section.

(b)

Brighton Ltd.
Income Statement
For the Year Ended June 30, 2020
Revenues:
Rental revenue ($55200 + $350)		55550
Less: Expenses
Salaries expense ($24200 + $2500)	26700
Repairs and maintenance expense	4100
Office supplies expense ($9900 + $500)	10400
Electricity expense ($1900 + $275)	2175
Depreciation expense ($8600 + $286)	8886
Insurance expense	4500
Interest expense	4100
Total expenses		60861
Net income (loss) $		-5311

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