Problem: Ready Hospital Supplies (RHS) trades in the buying and selling of supplies primarily targeting private medical practitioners. During the Covid-19 pandemic, the business hasn't experienced a...

Problem:

Ready Hospital Supplies (RHS) trades in the buying and selling of supplies primarily targeting private medical practitioners. During the Covid-19 pandemic, the business hasn't experienced a rapid increase in demand and RHS is faced with need for additional financing.

you are the accounting associate suppprting the credit request to millennial national bank (MNB) the corporate banking head at MNB is requesting a full set of financial statements to ensure that granting the loan will be financially feasible during a peri When many similar businesses are facing delinquency and foreclosures. Your head of finance has furnished you with the latest trial balance for RHS, along with other information relevant to the year under review and you are tasked to prepare the documents requested by MNB. Below is the trial balance extracted from the books on June 30. The end of the companies financial year.

the accrual method is required for financial statements

Extracted text: Ready Hospital Supplies Trial Balance as at June 30, 2020 Dr $ Cr $ Cash 127,000 Accounts Receivable 151,000 Allowance for Bad-Debts Merchandise Inventory Store Supplies Prepaid Insurance Prepaid Rent Furniture & Fixtures Accumulated Depreciation: Furniture & Fixtures |Computer Equipment Accumulated Depreciation: Computer Equipment Accounts Payable Salaries Payable Interest Payable Unearned Sales Revenue 12,500 187,500 58,000 72,000 56,000 800,000 256,000 450,000 133,500 27,000 82,000 Long-Term Loan Eva Ready, Capital Eva Ready, Withdrawals Sales Revenue Sales Discount Sales Returns & Allowances 360,000 898,500 104,000 1,043,000 7,000 5,500 Cost of Goods Sold 403,000 Salaries Expense Insurance Expense Utilities Expense Rent Expense Depreciation Expense – Furniture & Fixtures Depreciation Expense – Computer Equipment Store Supplies Expense Gain on Disposal of Old Computer Equipment Bad-Debt Expense Interest Expense 165,000 87,500 126,000 14,000 27,000 2,826,500 2,826,500 Total The following additional information is available at June 30, 2020: (1) Store Supplies on hand at June 30, 2020 amounted to $25,000. (ii) Insurance of $72,000 was paid on May 1, 2020 for the 6- months to October 31, 2020 (ii) Rent was paid on March 31, 2020 for the 4-months to July 31, 2020.


Extracted text: (iii) Rent was paid on March 31, 2020 for the 4-months to July 31, 2020. (iv) The furniture and fixtures have an estimated useful life of 10 years and is being down to a residual value of $160,000. depreciated on the straight-line method (v) The computer equipment was acquired on March 31, 2020 and is being depreciated over 5 years on the double-declining balance method of depreciation, down to a residue of $30,000 (vi) Salaries earned by employees not yet paid amounted to $14,000 at June 30, 2020. (vii) Accrued interest expense as of June 30, 2020, $9,000. (vii) At June 30, 2020, $48,000 of the previously unearned sales revenue had been earned (ix) The aging of the Accounts Receivable schedule at June 30, 2020 indicated that the Allowance for Bad Debts should be $19,500 (x) After making all other adjustments, a physical count of inventory was done, which reveals that there was $186,000 worth of inventory on hand at June 30,2020 Other data: The business is expected to make principal payments (xi) totalling $90,000 towards the loan during the fiscal year to June 30 ,2021 Required: a) Prepare the necessary adjusting journal entries on June 30, 2020. [Narrations are not required] b) Prepare the Adjusted Trial balance for the period ending June 30, 2020. e) Using the Adjusted trial balance, generate the statements requested by MNB, i.e. A Multiple-step income statement & a Statement of owner's equity for the year ended June 30, 2020 d) A Classified balance sheet, in report format, at June 30, 2020. Assignment Reebrie