Reference no: EM132641259

Question - Complete the following question highlighted in yellow before attending your Workshop:

You have been employed as an accountant for GMF Mining Group, a small family owned partnership. The following information as at 30 June 2020 (the 2020 reporting period) has been presented to you by Ms Lewis, the only family member who currently works in the business:

Note the business sells widgets that are exported to mining companies in WA. They buy these widgets from a supplier at cost price in Tasmania and place a 100% mark-up on the goods prior to selling them to their customers.

Estimated sales revenue for 30 June 2021 is $500,000

The below information relates to the 30 June 2020 period:

Cash sales for the period is $300,000

Credit sales for the period were $300,000

The business had cash expenses of: electricity $5,000, employee wages $100,000 and miscellaneous expenses $15,000.

Rent does not need to be paid as the warehouse building and land is owned. The building was constructed exactly 10 years ago for $100,000. Straight line depreciation is applied at an expected useful life of 20 years. The land at the time had a cost price of $200,000 and no revaluations have been completed to date.

10% interest is applied on a long term bank loan of $200,000. The loan will be paid back in full in 2030. At this stage no tax information has been provided.

Required - Prepare a 30 June 2020 income statement.