BHMH2101 2021/22 S2 Assignment 1. Information on adjusting entries: (1) Accrued, but unrecorded and unpaid Salaries amounted to $14,000. (2) On 1 July 2021, The Company borrowed $84,000 by signing a 2-year note payable at 8% annual interest rate. The entire note, plus 2 years' accrued interest, is due on 30 June 2023. (3) During December 2021, the Company purchased supplies costing $1,000 by cash. No entry has been made. Supplies on hand were $12,000 on 31 December, 2021. (4) On 1 August, 2021, the company paid for the rental of spa centre for 12 months in advance. (5) Spa coupons amounting $16,000 were redeemed in December 2021 for treatment. (6) The Company estimated that the income taxes expense for the entire year was $24,800, which to be paid next year. (7) On 31 December, 2021, a customer has bought a 2-day pass for using the spa facilities on 31 December, 2021 and January 1, 2022 for $2,000. The total amount for the 2-day pass will be paid by the customer when departing on January 1, 2022. (8) On 31 December, 2021, the owner has purchased a fitness equipment amounting $120,000 for her personal use. (9) The estimated useful life of equipment is five years and straight-line depreciation method is adopted. Depreciation expense had been updated to end of October 2021. (10) On 31 December, 2021, the Company declared a cash dividend of $0.20 per share to be paid on 31 March 2022. Required: (a) (b) Prepare the necessary adjusting journal entries on 31 December 2021 to bring the financial records of Relax Spa Company up-to-date. Use the account titles given in the Trial Balance or create new accounts where appropriate. Show your workings. Explanations are NOT required. If no adjusting entries are required, state "No entry" and name the accounting principle applied. (22 marks) Prepare the income statement for the year ended 31 December 2021, showing breakdown of items under the captions of Revenues, Expenses, Profit before Taxes, Profit after Taxes. (12 marks) (c) Prepare the statement of financial position as of 31 December 2021, showing breakdown of items under the captions of Total Assets, Total Liabilities, Total Shareholders' Equity and Total Liabilities & Shareholders' Equity. (22 marks) (d) Record its year-end closing journal entries. Explanations are NOT required. (14 marks)