In 2023, you were hired as the Chief Financial Officer for MC Travel Inc., a fairly young travel company that is growing quickly. A key accounting staff member has prepared the financial statements, but there are a couple of transactions that have not been recorded yet because she is waiting for your guidance regarding how these transactions should be recorded. In addition, the staff member is not confident in preparing cash flow statements, so you have been asked to prepare this statement for the 2023 year. MC Travel INC. reports under ASPE. The transactions that have not been recorded yet are as follows. On January 1, 2021, the company purchased a small hotel property in Miami for paying the balance. The bond principal is payable on January 1, 2022. When you were hired, and began to review the financial information from previous years, you quickly realized that the land portion of the total purchase price had been capitalized with building, and depreciated. Depreciation has been incorrectly recorded on the building for still included in the building account. The land portion of the purchase was appraised at million in 2021, and the land is currently worth amortized over a million. The company's tax rate is During 2023, the president, who is also the principal shareholder in the business, transferred ownership of a vacant piece of land in the Carribbean to the company. A hotel will be constructed on this property beginning in 2021. The cost when the president purchased this property was and the fair market value, based on the professional appraisal, at the time it was trasferred to the company was exchange for this land. This transaction has not yet been booked. Additional information that you have gathered to assist in preparing the cash flow statement is as follows: In 2023, equipment was purchased for during the year. Investment income includes a dividend of income of Following are the financial statements for MC Travel Inc. For (Please see financial statements on sheet #3) Instructions: From the information on the next page, complete the necessary adjusting entries to record the transactions that have not been booked, and prepare the revised balance sheet and income statement for the year, keeping in mind that comparative figures will need to be restated. Once this is complete, prepare a statement of cash flows in good form using the indirect method for the year ended December 31, 2023. Assume all transaction amounts have been reported in CAD$. Hints: Please set the formulas for restated-updated columns in accordance with the DR or CR character of the account. Formulize your cells in each spreadsheet, carry the amounts, if necessary from one sheet to another by formulas. Assume that prior year's accounts are still open for reporting purposes. Make sure that on Financial Statement pages (page 4 and 6)adjustment columns' debits are equal to credits. Accumulated Depreciation's ending balance at December 31, 2023 is account's ending balance at December 31, 2023 is the disposed-sold equipment's acumulated depreciation written off and how much cash was obtained from the sale. Complete the entry on page 5. President's transfer of the land to the company must be done from the fair value in the market. 2022 Adjusting entries should be carried forward (redone) to 2023 in order to update the opening balances in 2023. Do not include dividents received on your cash flow because it has already been included in your net income (a glitch in the problem). Go step by step: 1.Do the adjusting entries for 2022 (page 4). 2.Produce the balance sheet for 2022 (page 5). 3.Carry the 2022 adjustments to 2023 to update the opening balances (page 6). 4.Find 2023 adjusting entries and other required balances and entries for 2023 (page 6). 5.Complete financial statements on page 7: a.Transfer the 2022 restated balance sheet figures to column J. b.Write 2023 raw balance sheet figures on column E. c.Write the 2023 raw income statement figures on column E below. d.Write the adjusting entries to update the 2023 balance sheet and income statement. e.Obtain the restated-adjusted balances both for balance sheet and income statement for 2023 (page 7). f.Calculate the differences on balance sheet by substracting 2023 figures from 2022's on column K. 6.Complete the cash flow on page 8. start from restated net income figure on page 7. 7.Please do not forget that your cash balances (January 1 and December 31, 2023) should reconcile to your cash flow statement. 8.Reference column on pages 5 and 7 refers to your adjustmenting entries. 9.Plug in figure on page 6 does not require any entry just add it to Retained Earnings. MC TRAVEL INC. Balance Sheet December 31, Note: The statements before any adjustments. 2023 2022 ASSETS-Current assets Cash 7,600,000 5,040,000 Temporary investments 2,006,000 1,900,000 Accounts receivable 5,000,000 3,700,000 Allowance for doubtful accounts -200,000 -100,500 Total current assets 14,406,000 10,539,500 Capital assets Land 250,000 250,000 Building and equipment 55,270,000 55,072,000 Accumulated depreciation -7,425,000 -4,950,000 Total capital assets 48,095,000 50,372,000 Total assets 62,501,000 60,911,500 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable 3,800,800 4,100,750 Interest payable 30,000 15,000 Income taxes payable 350,000 250,000 Dividents payable 0 100,000 Total current liabilities 4,180,800 4,465,750 Long term liabilities Long term bank loan 1,145,000 807,000 Bond payable 5% Miami property due 2019 40,000,000 40,000,000 Future income tax liability 175,000 150,000 Total long term liabilities 41,320,000 40,957,000 Total liabilities 45,500,800 45,422,750 Shareholders' equity Common shares 1,000,000 1,000,000 Retained earnings 16,000,200 14,488,750 Total shareholders' equity 17,000,200 15,488,750 Total liabilities and shareholders' equity 62,501,000 60,911,500 Difference : Assets - (Liabilities + Shareholders' equity) 0 0 MC TRAVEL INC. Income Statement For The Year Ended December 31, 2023, $ Sales 37,500,000 Expenses: Salaries and wages 5,000,000 Purchases from tour operators 22,500,000 Depreciation expense 2,500,000 Office, general, and selling expenses 3,489,800 Bad debt expenses 150,000 Interest on long-term debt 30,000 Bond interest expense 2,000,000 Total expenses 35,669,800 Income before other income and expenses 1,830,200 Investment income 256,000 Gain on sale of equipment 73,000 Income before income taxes 2,159,200 Income tax expense 647,750 Net income 1,511,450 please answer this question Adjustment entries in 2023: Land adjusting entry carried from last year to update the opening balances in 2023. Land Building Adjustment for prior year end's accumulated depreciation, income tax payable and retained earnings. Carried in 2023 to update 2019 opening balances. Accumulated depreciation Income tax payable Retained earnings Depreciation adjusting entry in 2023. Accumulated depreciation Depreciation expense Income tax expense adjustment due to (3) above in 2023. Income tax expense Income tax payable Owner's transfer of land at fair value in 2023. Land Common sahres Plugged in number to update the Retained Earnings as at December 31, 2023. Credit adjustment in 2023 Income Statement from entry (3) above : Debit adjustment in 2023 Income Statement from entry (4) above : Plugged in number to RE to show the effect of adjustments on net income : Accumulated depreciation balance at January 1, 2023 : Depreciation charge for 2023 : Would be accumulated deprec. balance at January 1, 2023 : Accumulated depreciation balance given at December 31, 2023 : Accumulated depreciation debit entry for the equipment sold in 2023 : Cost of the equipment sold: Building and equipment balance at January 1, 2023 : Equipment purchased during the year-2020 : Building and equipment's would be balance at December 31, 2020 : Building and equipment's balance-given at December 31, 2020 : Cost of the equipment sold : Entry must have been made by the company regarding the equipment disposal-sale: Cash Accumulated depreciation of the equipment sold Cost of the equipment Gain from sale of the equipment