Question

Consider the information provided for Peak Financial Services

Record adjusting entries for the end of June. include narrations 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

Profit & loss for the period 30.05.2020
GAS exp	750	Revenue	213700
Fuel Exp	6400
Rent exp	30000
Salaries	32800
Profit & loss	143750
	213700		213700

Balance Sheet 30.05.2020
Liabilities	Amount	Assests		amount
ACCOUNT PAYABLE	26800	Cash		91450
UNEARNED FEES	12200	Accounts recivables		48300
LOAN PAYABLE	25000	prepaid rent		9000
GST PAYABLE	5980	PrepaID INS.		8000
Capital Peak A	32000	OFFICE SUPLIES		4700
"- drawings	-12500	OFFICE EQUIPMENT	92400
		"=- ACCUMULATE DEP	25000	67400
Profit	143750	GST receivable		4380
	233230			233230

		Cash A/c
01.6.2020	To balnce b/d	88300		By work Van	16775
01.06.2020	Cash receipt from cst	19800	15.06.2020	Paid all outstanding account	26800
09.06.2020	cash deposit for financial advisary	4730	24.06.2020	Salaries paid	2400
12.06.2020	Casgh received from cst money owed	22185	26.06.2020	Mobile phone bill paid	374
29.06.2020	Cash recipt from cst	3250
			30.06.2020	unearned fees refunded	7320
			30.6.2020	Fuel exp	800
30.06.2020	Bank Interst	230	30.6.2020	Withdraw by peak	4500
			30.06.2020	Balance c/d	79526
		138495			138495

		Purchase office supplies
	to balance b/d	4700	used	4500
	to balance b/d	2200
			By Balance c/d	2400
		6900		6900

		Account payable
to cash payment	26800		By balance b/d	26800
		05.06.2020	By Purchase suplies	2200
to balance c/d	2200
	29000			29000