Jefferson Jerome is interested in purchasing Art Specialists, Inc., an auction house. The company receives the right to sell art, but not to purchase the art themselves, for a 5% commission. Art Specialists rents office space and holds its auctions at local hotels.Art Specialists, Inc. Unadjusted Trial Balance December 31, 2009 Cash $ 65,000.00 Accounts receivable $ 36,000.00 Supplies $ 8,000.00 Equipment $ 53,000.00 Accumulated Depreciation $ 14,500.00 Accounts payable $ 5,600.00 Dividends $ 50,000.00 Capital stock $ 25,000.00 Retained earnings $ 84,900.00 Commission income $ 250,000.00 Rent Expense $ 20,000.00 Wages Expense $ 70,000.00 Auction Expenses $ 56,000.00 Depreciation Expenses $ 7,000.00 Membership Expenses $ 6,000.00 Supplies Expense $ 9,000.00 TOTAL $ 380,000.00 $ 380,000.00 As Jeffersons accountant, you have received the trial balance above as well as the general ledger. The review has found the following errors: Year end bank reconciliation showed that the balance should be $40,000. A customer should have been billed for $25,000, but it was recorded as a cash payment of the commission income. Membership expenses are not related to the business and should be shown as a dividend to shareholder. Depreciation expense should be $3,500 for the year. Supplies expenses failed to record $2,000 in packing supplies used during the year. Accounts receivables that have not been billed $10,000. Required: 1. Record the correcting entry. 2. Prepare financial statements 3. Current owners want $200,000 for the business. Jefferson does not want to pay more than Net Worth x 1.5. Should he buy