ControlSapphire Gems and Minerals Co Ltd $-$ Tourmaline Division

Trial Balance as of December $31,2022$

The following additional information is available December $31,2022$:

$1)$ Store Supplies on hand on December $31,2022,$ amounted to $$350,000.$

$2)$ Insurance of $$5,850,000$ was paid on January $1,2022,$ for the $18-$months to June $30,2023$

$3)$ Prepaid rent expired December $31,2022,$ amounted to $$1,110,000.$

$4)$ The furniture and equipment have an estimated useful life of $10$ years and is being depreciated on the straight$-$line method down to a residual value of $$100,000.$

$5)$ The motor truck cost relates to two Livi Trucks purchased for $$1,300,000$ each by the company on January $1,2016.$ The double$-$declining balance method of depreciation is used to compute the truck$$s depreciation charges and their expected useful life is $10$ years or $100,000$ miles. In $2016,15,000$ miles were driven, $18,500$ in $2017,15,600$ in $2018,17,000$ in $2019,14,500$ in $2020,10,800$ in $2021$ and $12,800$ in $2022.$ The residual value on both truck is $$272,630$ each. On July $1,2022,$ the company sold one of the trucks to Daley Company for $$480,000$ on credit. Round off answers to the nearest dollar.

$6)$ Salaries earned by employees and not yet paid amounted to $$1,500,000$ on Dec $31,2022.$

$7)$ Accrued interest expense as of December $31,2022,$ $$220,000.$

$8)$ On Dec $31,2022,$ $$875,000$ of the previously unearned sales revenue had been earned.

$9)$ The aging of the Accounts Receivable schedule on Dec $31,2022,$ indicated that the Allowance for Bad Debts should be $$359,000.$

$10)$ A physical count of inventory was done on December $31,2022,$ after making all the other adjustments and this revealed that there was $$8,450,000$ worth of inventory on hand at this point.

Other data:

$11)$ The business is expected to make principal payments totalling $$550,500$ towards the loan during the fiscal year to December $31,2023$

Required:

a$)$ Prepare the necessary adjusting journal entries on Dec $31,2022.[$Narrations are not required$]$

b$)$ Prepare the Adjusted Trial balance for the period ending December $31,2022.$

c$)$ Prepare the following financial statements for the division:

$$ A Multiple$-$step income statement & a Statement of owner$$s equity for the year ended December $31,2022$

$$ A Classified balance sheet, in report format, at December $31,2022.$