Your assignment needs to be submitted as a typed Word document. Format countsHere is an example of financial statements in good format. You can use a Word table to make life a lot easier. With a Word table, you can easily adjust the column with and right align the number columns. Titles are 3 lines. All numbers over 999 must have commas. Ex. 345,675,345. Numbers need to be right aligned. Center the heading. $ sign on top number in each column and the totals on all statements. Double underline the number of the statement total. Indent your line titles only two spaces. You need to use columns to sort numbers as appropriate – examples are in your text. Expenses need to be in an inside column. Underline a number that is to be added or deducted. Example: 2,450 3,450 5,900 We don’t use a minus sign or parenthesis for a deduction unless it would otherwise be confusing for a knowledgeable financial statement reader. No total line if there is only one item in the category. Format so the account titles each fit on one line. No inside column if there is just one item. No abbreviations anywhere except for the month in the date column of journal entries. Salem Corporation Income Statement Year Ended December 31, 2021 Revenues: Service revenue $ 680 Expenses: Salary expense $240 Rent expense 150 Supplies expense 40 Depreciation expense 50 Total expenses 480 Net income $200 Salem Corporation Balance Sheet December 31, 2021 Assets Cash $ 400 Accounts receivable 250 Supplies 80 Prepaid rent 120 Equipment $ 600 Accumulated depreciation 50 550 Total assets $ 1,400 Liabilities and Shareholder’s Equity Liabilities Accounts payable $ 260 Salaries payable 70 Unearned revenue 190 Notes payable 500 Total liabilities 1,020 Shareholder’s Equity Common stock $100 Retained earnings 280 Total Shareholder’s Equity 380 Total liabilities and shareholder’s equity $ 1,400 Netlock Security Inc Statement of Changes in Equity Year Ended June 30, 2021 Common Shares Retained Earnings Totals Closing Entries date account title debit credit June 30, 2017 Security Revenue 449,000 Salaries Expense 33,000 Interest Expense 1,250 Depreciation Expense 21,400 Supplies Expense 4,700 Repairs Expense 17,000 Insurance Expense 9,333 Rent Expense 60,000 Income tax expense 7,000 Retained earnings 56,817 Retained earnings 10,000 Dividends 10,000 Assignment 2 #1 (14 marks – 28 minutes) The following account balances relate to the Desjardins Company’s December 31, 2017 year-end financial statements: Retained earnings, Jan. 1, Year 7 $ 26,000 Cash 56,000 Income tax expense 24,000 Consulting revenue 250,000 Note payable 55,000 Repairs expense 10,000 Utilities expense 15,000 Supplies expense 14,000 Supplies 4,000 Salaries expense 100,000 Accumulated depreciation, equipment 5,000 Interest expense 6,000 Equipment 65,000 Dividends – Common 25,000 Common shares, Jan, 1, Year 7 1,000 Accounts receivable 18,000 Accounts payable 3,000 Depreciation expense 3,000 Notes: • There were no common shares issued or repurchased during the year. • The current portion of the Bank Loan payable was $4,000. All accounts have a normal balance. Required: a.) Prepare an income statement for the year ended December 31, 2017. (4 marks) b.) Prepare a statement of changes in equity for the year ended December 31, 2017. (3 marks) c.) Prepare a Balance Sheet as at December 31, 2017. (6 marks) d.) Compute the company’s debt ratio. (1 mark) #2 (6 marks – 12 minutes) The following transactions occurred for Mary’s Consulting in the company’s first month – January, 2018 – record journal entries for each transaction. January 1 Mary deposited $2,000 in to the company’s bank account in exchange she received 100 common shares in the company. January 5 The company purchased $500 of office furniture on account. Payment is due on February 5. January 8 The company did consulting work for a client. Billed $3,000. Received half of the money, with the other half due in one week. January 10 Paid employee’s wages of $200. January 13 Collected the amount due from January 8. January 15 Paid the bill from January 5. #3 (7 marks – 14 minutes) (V1) Fred’s Security has the following transactions and items requiring December 31, 2017 adjustments. Prepare journal entries as necessary. a.) i.) The company purchased a 12-month insurance policy for $2,000 cash on March 1, 2017. ii.) A December 31 adjustment is required. b.) i.) The company entered into a contract to provide security work for a client. The client paid Fred’s security $10,000 on October 1, 2017. The company was required to provide security service for 12 months, from October 1, 2017 – September 30, 2018. This makes it actually 12 months. ii.) A December 31 adjustment is required (assume the company provided security service as promised up to December 31). c.) The company pays salaries of $8,000 every week on Sunday, based on a 7-day workweek. Assume salaries are earned at the same rate each day. This year, December 31 falls on a Thursday. Record the necessary adjustment. d.) i.) The company purchased a car for $15,000 cash on February 1, 2017. The car is expected to have a 10-year useful life and no residual value. The company’s accountant wishes to use straight line depreciation. ii.) A December 31 adjustment is required. #4 (3 marks – 6 minutes) The July 31, 2018 adjusted trial balance of Anderson Company is found below: Cash $ 1,000 Accounts receivable 1,500 Supplies 500 Notes receivable 600 Equipment 32,000 Accumulated depreciation, equipment $ 14,000 Land 58,000 Accounts payable 500 Notes payable 1,000 Mortgage payable 30,000 Common shares 100 Retained earnings 32,000 Dividends 2,000 Repairs revenue 55,000 Wages expense 20,000 Supplies expense 1,000 Depreciation expense 3,000 Maintenance expense 5,000 Interest expense 2,000 Income tax expense 6,000 Totals $132,600 $132,600 Required: Prepare closing entries for the company. #5 (4 marks – 8 minutes) Smith Inc. Bank Reconciliation July 31, 2017 Balance per bank $3,359 Balance per book $2,550 Add: deposit in transit 817 NSF cheque J Brown (300) Deduct: Outstanding cheques # Collected note receivable 408* 232 $1,061 Bank fees (18) 234 240 Bookkeeper error (9) 195 195 49 49 (1,545) Balance $2,631 Balance $ 2,631 (*) The collection included the original note of $380 and interest of $28. (**) The bookkeeper made an error recording a payment on account. They recorded the cheque, a payment on account for $1,590, the actual amount of the cheque was $1,599. Required: Based on the completed Bank Reconciliation above, please record any required journal entries. #6 (5 marks – 10 minutes) Smith Company shows the following information on December 31, 2017, the company’s fiscal year-end: Account Debit Credit Accounts receivable $17,000 Allowance for doubtful accounts 400 Sales ($5,000 of cash sales) $75,000 The company’s accountant generated the following aging schedule of accounts receivable: Number of Days Outstanding Amount Receivable Estimated Uncollectible 0-30 days $10,000 1% 31-60 days 4,000 5% 61-90 days 2,000 10% Over 90 days 1,000 25% Required: a.) Prepare the adjustment to allowance for doubtful accounts based on the information above. b.) Show how accounts receivable, net would be disclosed on the balance sheet. c.) What is the most likely cause of the allowance for doubtful accounts being in a debit balance? d.) On February 15, 2018, the company writes off a $300 account receivable from Marco Inc. Record the journal entry.