Amanda Company

The following is the unadjusted trial balance of Amanda Company as at 31 December 2017:

Account title	Debit ($000)	Credit ($000)
Office equipment	900
Accumulated depreciation at 1 January 2017 Office equipment		360
Amanda Chan, Capital		1,054
Amanda Chan, Withdrawals	80
Cash at bank	63
Accounts payable		85
Bank loan (required to make a $35,000 repayment during financial year ended 31 December 2018)		200
Sales		1,500
Purchases	950
Purchases returns / Returns outwards		50
Office supplies	40
Inventory at 1 January 2017	520
Utilities expense	29
Accounts receivable	390
Insurance expense	0
Interest expense	5
Rental income		128
Unearned rental income		0
Salaries expense	388
Prepaid insurance	12
Office supplies expense	0
Depreciation expense Office equipment	0
Salaries payable		0
Total	3,377	3,377

Additional information:

1) Insurance premium of $12,000, which covers a one-year period from 1 April 2017 to 31 March 2018, was paid on 1 April 2017.

2) The salaries expense of $15,000 for December 2017 is to be accrued.

3) The company debits the office supplies account when supplies are purchased. Office supplies on hand at 31 December 2017 are $14,000.

4) Rental income of $7,000 was received in advance.

5) The office equipment is depreciated by the straight-line method over its useful life of five years with no residual value. There was no addition and disposal of office equipment during the year.

6) After a physical inventory count, the cost of inventory at 31 December 2017 was $652,000.

Required

1) Prepare journal entries for the above year-end adjustments (i) to (v). Include explanations.

2) Prepare the income statement for the year ended 31 December 2017.

3) Prepare the statement of financial position (balance sheet) as at 31 December 2017 (in vertical form).