( : Assignment-term 212.docx PART ONE ABC Hardware Store had the following transactions during the year starting January 1, 2020. At the beginning of 2020, the ledger of ABC showed Cash of 100,000 SR, opening Inventory 12,000 SR (600 units at 20 SR per unit) and Owner's Capital of 112.000 SR. (ABC Co. uses the FIFO method in inventory valuation). 1. ABC invested 40,000 SR cash in the business. 2. Purchased a truck from Mitsubishi Motors for 16,000 SR on credit. 3. Paid in advance 5,400 SR cash on a 3-year insurance policy effective January 1. 4. Paid 5,600 SR cash for employee salaries 5. Paid 700 SR cash for the repair expenses for the truck 6. Withdraw 6,000 SR cash for personal use. 7. On April 1. ABC purchased 1,000 units from Blaze Co., a supplier, for 30 SR per unit with a settlement discount of 5% if it paid the price within 10 days from the date of purchase. 8. On July 15, ABC purchased 1,400 units from Mohammed Co., a supplier, for 34 SR per unit with a settlement discount of 5% if it paid the price within 10 days from the date of purchase. 9. On August 1. ABC sold 1.200 units to Star Co. at a price of 60 SR per unit with a settlement discount of 4% if the price is received within 10 days from the date of sale. The company is not expecting the customer to take the advantage of the discount) 10. On April 6, ABC paid the full amount due to Blaze Co 11. On August 15, ABC settled (puid) the amount due to Mohammed Co., 12. On October 1, ABC sold 200 units at 56 SR per unit to Noor Co. that paid the price in full at the time of the transaction 13. ABC received interest income 4.000 SR 14. Rent received from let out of a property was 3,000 SR in the year ended December 31, 2021 PART TWO The following transactions require adjustments in the trial balance. Prepare the adjusted trial balance. 1. The company depreciate the truck at 10% straight line. A full year's depreciation is charged in the year of purchase and none in the year of disposal. 2. The insurance expense is relevant for 3 years. 3. Accrued but unpaid employee salaries were 2,000 SR. 4. ABC Co. rents out a property for 200 SR per month. (rent income) 5. ABC has a bank deposit in which it receives an interest income of 400 SR per month. 6. The credit manager estimated that there was evidence that amounts totaling 12,000 SR may not be recovered as those receivables were already overdue and he therefore wanted to make a specific allowance for this amount. Instructions (for both parts): a) Journalize and post the 2021 transactions. b) Prepare a trial balance on December 31. c) Prepare an adjusted trial balance on December 31. d) Prepare the Statement of Profit or Loss and Statement of Financial Position for the year ending 31 December 2021