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Golda Gyn1 is in the process of obtaining a loan at Metrobank. The bank has requested audited nancial statements. Golda Gym's nancial statements have never been audited before. it has prepared the following condensed nancial statements for the year ended December 3 1, 2018. Golda Gym Statement of Financial Position December 31, 2018 Assets Current Assets 4,015,000 Hon current Assets 222,000 Total Assets 4,242,000 Liabilities and Equity Liabilities 802,000 Shareholders' Equity Ordinary Share 1,3 00,000 Retained Earnings 2,3 35,000 Total Liabilities and Equity 4,242,000 Golda Gym Statement of Financial Position For the year ended December 31, 2018 Sales 5,000,000 Cost of Goods Sold I 2,150,000! Gross Income 2,85 0,000 Operating Expenses Selling Expenses [1,150,000] Administrative Expenses [IE-00,000! Operating income 1,100,000 Income Tax {30 3'71] | 330,000 I Net Income Tr"? 0,000 The 2018 audit revealed the following facts: a. On Iauualy 5, 201?, Golda Gym had charged a 5year insurance premium to expense. The premium totaled P3 1,00 0. b. The amount of loss due to bad debts has steadily decreased over the last 2 years. Golda Gym has decided to reduce the amount of bad debt expense from 23.18% to 1% 3i. of sales, beginning with 2018. A charge of 2% has already been made for 2018. Golda Gym uses the periodic inventory system. The following are the inventory errors for the last 2 years. [n 201?, ending inventory was overstated by P?5,500 and in 2018, ending inventory was overstated by P99,000. An ofce equipment costing P150,000 was acquired on january 3, 201?. The purchase was recorded by a charge to operating expense. The equipment has a useful life of 10 years and a residual value of 825,000. Golda Gym uses the straightline method in depreciating its assets. 1. Determine the adjusted balance of total assets as of December 31, 2018. 2. Determine Golda Gym's corrected net income for the year ended December 31, 2018. 3. Determine the effect of the errors to the balance of Retained Earnings, Ianuary 1, 2018. Indicate whether overstated or understated. 4. Prepare a compound entry to adjust items G and D assuming that 2018 books are still open