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During the year ending 30 June 2022, Prof Financial Advisory Service reports cash revenue of...

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Accounting

During the year ending 30 June 2022, Prof Financial Advisory Service reports cash revenue of $220,000 and cash expense of $140,000.

Additional information:

1. Salary payable as at 30 June 2022 is $7,800;

2. Annual depreciation expense of $20,000 is not included in the cash expenses;

3. Fees for advice given for the year ended 30 June 2021 for $9,000 were collected in the current year and are included above;

4. Fees earned in the current year of $12,000 are expected to be collected in the following year.

Required:

a) Using the above information, prepare the Statement of Profit and Loss on the accrual basis of accounting. Show all calculations.

b) The depreciation expense above is for printing equipment with an initial cost of $82,000. The equipment is expected to be used for 4 years with a residual value of $2,000. The accumulated depreciation as of 1 July 2021 was 20,000. Prepare a journal entry to record the depreciation expense for the year ended on 30 June 2022. Calculate the age of the printing equipment as at 30 June 2022. Show all calculations.

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