ADDITIONAL INFORMATION

$1.$ NATTIE Corp. uses the allowance method to record Bad Debts based on an estimate of $5\%$ of the Ending Accounts Receivable.

$2.$ The Office Building is depreciated at $10\%$ of cost per year

$3.$ The Office Equipment is depreciated straight line and has a residual value of $$6,000.$ It was purchased on May $1,2020$ and it is estimated to have a useful life of $5$ years.

$4.$ FV$-$ NI Short term investments have a fair market value of $$32,300$ on December $31,2020.$ Investments need to be recorded at fair market value at year end and any gain or loss is recorded on the Income Statement.

$5.$ The Prepaid insurance includes : Policy A$,$ cost of $$12,700,$ three year term, paid in advance on April $1,2020$ AND Policy B$,$ cost of $$3,756,$ two year term paid in advance on June $1,2020.$

$6.$ The company performed a year end physical count of its inventory as at December $31,2020.$The amount of inventory on hand at December $31,2020$ amounted to $$415,700.$Inventory is maintained on a PERIODIC basis. Therefore the year end inventory adjustment is required.

$7.$ A one year $6\%$ note payable of $$60,000$ was signed on August $31,2020.$

Items affecting the Financial Statements $($do not record any adjusting entries; make the adjustment on the affected Financial Statement$)$:

A$.$ There was an error that was discovered in prior years where last year$$s depreciation expense was overstated by $$120,000.$

B$.$ The Number of common shares outstanding at January $1$ was $110,000.$ On May $1,$ an additional $40,000$ were issued. On November $1,$ another $10,000$ common share were issued.

C$.$ The Cash balance includes a $$18,000$ bank overdraft from another bank and a $16$ month investment of $$35,000.$

D$.$ The Accounts Receivable balance includes a credit balance in a customer$$s account equal to $$10,000.$

E$.$ The tax rate is $25\%$

Questions:

$1.$ Prepare the Adjusting Journal Entries required for the $2020$ fiscal year at December $31,2020($ITEMS $1-7$ ABOVE$)$

$2.$ Prepare an adjusted Trial Balance $($Update Trial Balance with new accounts and new balances after the adjusting entries$)$

$3.$ Prepare a multi$-$step Income Statement

$4.$ Calculate Earnings per share and show the presentation on the Income Statement

$5.$ Prepare a Statement of Retained Earnings

$6.$ Prepare a Classified Balance Sheet