I Required (show all the calculations to receive full points): 1. Prepare in good form the necessary adjusting entries as at December 31, 2019 for events (a) to (e) above. T-Accounts are NOT required. Please skip a line between journal entries. You may omit narrative explanations but be sure to show all calculations. [22 points) 2. Prepare, in good form, a multiple-step income statement for the year ended December 31, 2019. [24 points) 3. Prepare, in good form a classified balance sheet as at December 31, 2019. (24 points) 4. When was the equipment purchased? (3 points) 5. What effect would there be on the financial statements if the company fails to adjust the prepaid insurance expense account at year-end for insurance coverage that has been used? [4 points) QUESTION 2 [77 points; 45 minutes) Preparation of journal entries and financial statements Deana World Inc, manufactures and sells t-shirts. The Company reported the following accounts and balances in its unadjusted trial balance as at December 31, 2019. Note that the accounts are listed in alphabetic order. Accounts payable 30,000 Accounts receivable 30,600 Accumulated depreciation 16,000 Cash 21,000 Cost of goods sold 168,000 Equipment, at cost 68,800 Investments (long-term) 37,000 Merchandise inventory 27,500 Other revenues 7,700 Note payable, due March 1, 2021 35,000 Prepaid insurance 1,800 Rent expense 13,850 Retained earnings, Jan 1, 2019 29,550 Salaries expense 30,500 Sales revenue 229,850 Share capital (1,000 shares) 50,000 Supplies 2,050 Uneamed revenue 3,000 All of the above accounts have "normal" debit and credit balances, as defined in the textbook. Additional information available at year end: a) The company declared cash dividend of $1.50 per share on December 31, 2019. The dividend is to be paid in January 2020. b) of the unearned sales revenue, a total of $2,400 was earned by December 31. The cost of goods sold related to this revenue is $1,500. c) The balance in Prepaid Insurance represents the cost of a one-year Insurance policy purchased on September 1. The policy was effective on that date, and the monthly insurance premium is constant. d) The Equipment has a useful life of 8 years and $4,800 residual value. e) A physical count of supplies at December 31, 2019 showed that the cost of supplies on hand was $950. f) The note payable was signed on March 1, 2019. Interest on the note is 6 percent and it is payable annually on March 1. B) The company is subject to a 30% income tax rate