Debits Part 2A (26 points) Requirement 1: On December 31, 2019, Sooner Company recorded adjusting entries for items a-c below. For each item: 1) Record the necessary adjusting entry ON DECEMBER 31, 2019. SHOW COMPUTATIONS 2) Show the effect of the entry, if any, on Sooner's 2019 financial statements in the table below: Identify the ACCOUNT affected, +/-, and the DOLLAR AMOUNT. If an element increases and decreases, show BOTH effects. Leave the space blank if no effect. Example: On December 31, 2019 issued common stock for $50,000. Cash 50.000 Common stock 50,000 Part 3A (29 points) On December 31, 2019, Cuccia Chocolates, Inc. reported the following adjusted trial balance: Account Title Credits Cash $ 72.000 Investments (See 1 below) 80,000 Accounts receivable 60,000 Inventory 88,000 Prepaid expenses (See 2 below) 42,000 Equipment 290,000 Allowance for uncollectible accounts 6,000 Accumulated depreciation 50,000 Accounts payable and accrued liabilities 30,000 Notes payable (See 3 below) 400,000 Common stock 100,000 Retained earnings 34,000 Sales revenue 791,000 Interest revenue 3,000 Cost of goods sold 650,000 General and administrative expenses 71.000 Loss on sale of investments 9,000 Product recall costs 48,000 Income tax expense 4,000 Totals $1.414,000 $1,414,000 a. On December 31. 2019, recorded an adjusting entry for interest. Earlier, on March 1, 2019, Sooner loaned $30,000 to a supplier and received a 3 year, 10% note. b. On December 31, 2019, recorded an adjusting entry for advertising. Earlier, on November 1, 2019, Sooner paid $24,000 for 6 months of advertising and debited Advertising Expense for $24,000 Additional information: 1. Investments of $80,000 includes: $80,000, 90-day Treasury bill. 2. Prepaid expenses an asset) of $42,000 includes: $16,000 paid for rent for 2 years (58,000 each year in 2020 and 2021). 26,000 paid for costs to be used in 2020. 3. Notes payable of $400,000 includes: $ 35,000 note due in 3 months. 270,000 note due in 3 annual installments of $90,000 each, beginning in 2020. 95,000 note due in 5 years. c. On December 31, 2019, recorded an adjusting entry for revenue. Earlier, on September 1, 2019, Sooner received $18,000 in advance for services to be provided evenly over the next 12 months and credited Deferred Revenue for $18.000 Requirement 1: Determine the amount of Current Assets and Current Liabilities to be reported on the 2019 balance sheet. Show any work necessary to support your answers. SHOW ONLY THE AMOUNTS INCLUDED (e.g., 60,000 + 700,000 - 20,000 740,000); DO NOT PREPARE THE ACTUAL SECTIONS OF THE BALANCE SHEET. Current Assets Current Liabilities = LIABILITIES 2019 NET INCOME ASSETS +50,000 Cash SHAREHOLDERS' EQUITY +50,000 Common Stock Example Requirement 2: Determine the acid-test ratio (round to 2 decimal places). Show computations to support your answer. Requirement 3: Determine the amount of Operating Income to be reported on the 2019 income statement. SHOW ONLY THE AMOUNTS INCLUDED (e.., 60,000 + 700,000 - 20,000 = 740,000); DO NOT PREPARE AN INCOME STATEMENT