Michael’s Car Repair Services was established on 1^st of July 2020 as a sole proprietor business, specialising in providing car repairs and general maintenance services. The owner, Michael Robert, contributed $110,000 in cash to start the business. Towards the end of the financial year, Michael has hired you to work as a part-time accountant to prepare financial statements of the business. While looking at the financial records, you have noted the following unadjusted Trial Balance of Michael’s Car Repair Services on 30^th June 2021.

	Unadjusted Trial Balance
	Debit ($)	Credit ($)
Cash at Bank	60,000
Trade & Accounts Receivable	14,000
Office Supplies	10,000
Prepaid Rent	20,000
Machinery & Equipment	140,000
Loans Payable		50,000
Accounts Payable		15,000
Accumulated Dep. – Machinery & Eqpt.		18,000
Michael, Capital		110,000
Service Revenue		125,000
Interest Income		5,000
Wages Expense	38,000
Office Supplies Expense	26,000
Marketing Expense	15,000
	323,000	323,000

You have also discovered the following information that has not yet been recorded and need to be adjusted in the company’s accounts for the year ended 30^th June 2021.

Additional Information:

1. Depreciation on the machinery & equipment for 1 year is $12,000.
2. A prepaid rent of $14,000 has expired.
3. Electricity expenses owing at 30^th June 2021, $16,000

Required:

A. Prepare a worksheet for the year ended 30^th June 2021.

B. Prepare an Income Statement for the year ended 30^th June 2021.

C. Prepare a Balance sheet (in narrative form) as at 30^th June 2021.

Answer rating: 100% (QA)

A Worksheet for the Year Ended 30th June 2021 Adjustments Adjusted Trial Balance Debit Credit Debit ... View the full answer