Charlie's Internet Caf$$

Charlie's Internet Cafe $($CIC$)$ was established and ineorporated on January $1,2016,$ by Bruce Waitens and has just completed its third year of operations with a year end of December $31.$ Bruce was bom in the Muskoka region and after completing his university degree in history, he decided to retum to the area to set up his own business. After months of research, Bruce decided to open his husiness along the Giravenhurst waterfront. His research showed that there was tremendous potential in that area, especially during the summer tounst season, for a small caf$$ with an Intemet service. Loven cottagers without service suygested that they would find it appealing to check their email while shopping in the trendy area.

CIC runs out of $90$ square metres square fret$)$ of space. It has one entrance into the caf$$ and patio doors leading out to a deck that overlooks the water. CiC pays $$5,000$ per month for the rental of the space. Bruce was able to negotiate with the landlord and was nos required to pay the first month's rent in advance. All of his rental payments are current and up wo tate liv lhe last wo yeirs, CIC has had a very reliable accountant prepare its year$-$end financial stutement und wverything has been correct. This year, CIC's accountant retired and Bruce did the best he could receming his own funancial information. For the information he was not sure about, he kept all of the required suppuing dacumentation. Bruce hired your accounting firm to prepare his financial statements for the ywar and you were assigned the job. Bruce supplied you with his unadjusted trial balance and the information in lexhibit I to assist you.

Additional information:

The amount currently sitting in prepaids arose due to the insurance policy last year. Bruce didn't know how to correct it$,$ so he left it$.$ This year's insurance policy was purchased on November $1$ for $$9,000.$ The policy runs from November $1$ to Oetober $31$ of each year.

Bruce has a note that he owed $$900$ in wayes to his employees for the period ending December $31.$

The loan was incurred when the cafe was opened. The loan carries an interest rate of $8\%.$ The interest is payable two months after year end and the principal is due in $2022.$

CIC will sometimes book special events with small onganizations that are allowed to pay after the event has taken place. On December $29,$ a small company had a gathering at the cafe. The company was billed $$1,089$ and has $30$ days to pay it$.$ Bruce has not yet recorded this in his financial records.

CIC declared a dividend of $$5,000cn$ December $30.$

Bruce didn't know how to record amortization for the year and so keft it for you to record. Amortization for all assets is charged using a straight$-$line method by taking the cost of the asset and dividing it by its expected useful life. The assets have expected useful lives as follow:

Computers: $5$ years

Caf$$ equipment: $10$ years

Fumiture and fixtures: $20$ years

$13$ The information shows that CIC owes $$400$ for a telephone bill and $$300$ for electricity for Deeember. These amounts have not been reconded yet.

Required

Based on the information you have, prepare the wdusting jourmal entries, an adjusted tnal balance, the statement of eamings $($income statement$),$ statement of financial position $($balance sheet$),$ and statement of retained earnings. After you have completed the statements, prepare the closing journal entries and the postclosing trial balance. Ensure you show all of your work and prepare proper journal entries and properly formatted financial statements.