Background

On December 1, 2022, you were hired as the assistant accountant for Dans Diamonds Ltd., a small company located in Winnipeg Manitoba. The owner of the company, Dan Drew, opened the company one year ago and hired Linda, an in house accountant/manager to look after the bookkeeping and help with the finances. Dan hired you to help Linda because of your training and wanted you to take over the bookkeeping while Linda starts more of the store management for him.

It is now December 28 and Dan came to you today at lunch time and told you that Linda is sick and unable to come to work. He needs you to help get the financial records ready to send to the auditor.

He gave you the opening trial balance and a list of the transactions for December that related to the sales and operations. He also gave you information for accruals and other items that need to be posted before the books are completed for the year.

After finishing your lunch you head back to your office to complete the tasks ahead of you.

Required:

A Record the transactions for the month of December using proper journal entries

B Using the journal entries, record T accounts for all accounts

C Record the adjusting entries for the year at December 31

D Complete the T accounts with the adjusting entries

E Create the final trial balance

Create the balance sheet, income statement, statement of changes in equity, and the

F cash flow statement using proper form

2

Dans Diamonds Ltd. Unadjusted trial balance December 1, 20X2

Cash

Accounts receivable Inventory

Prepaid rent

Prepaid insurance Equipment

Accumulated amortization Accounts payable

Bank loan

Unearned revenue Common shares

Retained earnings

Sales

Insurance expense

Office supplies

Payroll expense

Legal expenses

Shipping expense Telephone expense

Rent expense Depreciation

Income tax expense

15,600 36,000 24,000

8,000 10,000 45,000

2,000

9,800 150,000 2,600

5,200

4,800 10,000

- 323,000

9,000

5,600 25,000 7,400 1,000 35,000 240,000

323,000

3

Transactions for December

a) Purchased a new forklift for $12,000 to help carry the diamonds around the warehouse. The company paid $6,000 cash and the balance is due in six months

b) Sold $40,000 in blue diamonds on account to a major customer with payment expected in 90 days

c) Dans brother Carl bought $500 in shares in the company

d) Paid $2,300 for repairs to office equipment in cash

e) Bought $2,000 with cash for supplies to be used next year

f) Bought $15,000 in new inventory on account

g) Paid employees at year end with cash totalling $8,900

h) Received a phone bill for $120 that is payable on January 14

i) Completed $5,000 of the special design contract that was set up as

deferred revenue

Other information

j)

k)

l) m)

The insurance policy was paid in August and expires July 31 2023. Consider if this should be adjusted

The company prepaid its rent at $1,000 a month for a storage facility. The company prepaid 8 months and the expiry is February 28

Tax rate is 20%

Amortization is $3,000 annually on the existing equipment, and the new forklift is estimated at $2,000 per year. please solve this answer as soon as possible. I found answers on chegg but they are not accurate and they seems incomplete. Please answer the question by following each and every step. Please answer the full question by mentioning values of each part