1.Messy Fairs Inc. operates trade fairs around the country. Its G/L Trial Balance at January 31^st, 2021 can be summarized as follows:

Assets - $700,000

Liabilities - $400,000

Equity - $200,000

Revenue - $600,000

Expenses - $500,000

You discover the following items that require some adjustment:

a.assets include accounts receivable, that cannot be recovered or collected, in the amount of $25,000.

b.inventory carried in assets at a cost of $120,000 has a net realizable value (NRV) of $85,000.

c.the company has agreed to settle a damages claim launched by an exhibitor under which Messy Fairs Inc. will pay damages of $25,000. No accounting entry has been made. The amount agreed will be paid in 5 monthly installments of $5,000 each beginning February 28^th, 2021

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(a) Show the necessary adjustments in the G/L schematic

(b)Compute the net income for the year after adjustments have been made

(c)Compute the ending balance in equity after adjustments have been made (this will be the balance that would be shown on the company's balance sheet at January 31^st, 2021).