Jonathan Lenn is a sole trader who has been in business for a number of years. The following trial balance was extracted from the books for the year ended December 31, 20x Cr Buildings 140,000 Accumulated depreciation Buildings 36,000 Motor vehicles 000 Accumulated depreciation: Movies 13.000 Fatures and Fing 300,000 Accumulated deprecation: Futures and Frings 50,000 Accounts receivable 96.000 Accounts payable Inventory 45,000 Cost of goods sold 283.400 5.800 8:400 Revenue 0000 Clearing and Repai 1.500 Stationery expense 1.200 Electricity expense 1,300 Telephone expense 1.300 2.500 Bank charges 150 14.000 Long term loan 00.000 Advertising expense 2.700 Common stock 121,000 Allowance for doubtful accounts Retained eamings Ganuary 1, 20 56,450 2.200 837,350 Page 2 TURNOVER You are given the following information: A stationery count revealed that $400 of stationery was left The provision for bad debts should be adjusted to 5% of debtors Electricity accrued at the end of the year was $1,300 Depreciation should be booked on property, plant and equipment as follows: Buildings: 2% straight-line Fixtures and fittings: 12% straight line Motor vehicles: 10% straight line The company has $400 of prepaid insurance at year end Accrued wages for the last four days of the year were $24,000 Required: a) Joumalize the relevant adjusting entries for the year ended December 31, 20x8 b) Prepare a multiple-step income statement. (10 marks) (10 marks) c) Prepare a classified balance sheet as at December 31, 20x8 (10 marks) d) Prepare the closing entries as at December 31, 20x8 e) Distinguish between "accrual based accounting" and "cash based accounting". f) Discuss the purpose of adjusting entries and closing entries in financial accounting (4 marks) (7 marks) (4 marks)