L Instructions For each of the above transactions, do the following: Instructions (a) Prepare a trial balance. (a) Prepare an equation analysis. (b) Journaling the transactions. (c) Set up T accounts, post the joumal entries to the general ledger, and determine the ending balance in each account (1) Prepare an income statement, statement of changes in equity, and statement of financial position for the year. (c) If you did not know the retained earnings amount at July 1, 2016, in the trial balance, could you have prepared the financial statements in part (b)? Explain. 25. Stirling Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2015: 1. Purchased a one-year insurance policy on June 1, for $1,800 cash. 2. Paid $6,500 on August 31 for five months' rent in advance. 3. On September 4, received $3,600 cash in advance from a corporation to sponsor a garnie cach month for a total of nine months for the most improved students at a local school. 4. Signed a contract for cleaning services starting December 1, for $1,000 per month. Paid for the first two months on November 30. (Hint: Use the account Prepaid Services to record this prepayment.) 5. On December 5, received $1,500 in advance from a gaming club. Determined that on December 31, $475 of these games had not yet been played. 24. The following is a list of accounts, in alphabetical order, for Dolly's Pet Grooming Inc. at June 30, 2017: Accounts payable $9.500) $ Accounts receivable 14.000 Accumulated depreciation--equipment 21,400 Bank loan payable, due 2019 39,000 Cash 8,000 Common shares 38,000 Depreciation expense 9.700 Dividends declared 800 Equipment 99,000 Held for trading investments 20,000 Income tax expense $3,000 Insurance expense 1.800 Interest expense 3,6X) Prepaid insurance 200 Rent expense 9,000 Repairs and maintenance expense 10,450 Retained earnings 20,850 Salaries expense 25.000 Salaries payable 800 Service revenue 75,000 Additional information: All accounts have a normal balance. During the year, the company issued common shares for $11,000. Instructions (a) For each of the above transactions, prepare the joumal entry to record the initial transaction. (6) For cach of the above transactions, prepare the adjusting journal entry that is required on December 31. (How: Use the account Sponsorship Revenue for item 3 and Repairs and Maintenance Expense for item 4.) (c) Post the journal entries in parts (a) and (b) to Taccounts and determine the final balance in each account balance. (Note: Posting to the Cash account is not required.) 26. On March 31, 2019, SPMD Ltd. prepared an income statement and statement of financial position, but failed to take into account three adjusting journal entries. Prior to correcting this omission, the income statement reported net income of $90,000 and the statement of financial position reported total assets $170,000, total liabilities $70,000, and total shareholders' equity $100,000. L 16. The total weekly payroll for Ninja Bakery Ltd. is $5,000 ($1,000 per day). The payroll is paid every Saturday for employee salaries earned during the same five-day workweek (Monday through Friday, inclusive). Salaries were last paid on Saturday, October 27. This year the company's year end. October 31, falls on a Wednesday. Salaries will be paid next on Saturday, November 3. Prepare the journal entries to record each of the following: (a) Payment of the salaries on Oxtober 27 (b) The adjustment to accrue salaries at October 31 (c) Payment of the salaries on November 3 Receipt of bank loan 5 Purchase of long-term investment 6. Purchase of equipment Sale of merchandise to customers 8. Payment of salaries to employees Sale of long-term investment 10. Repayment of loan owed to bank 11. Payment of dividends 12. Payment of interest on money borrowed from beink 9. Pestructions 17. Vathsala Corporation reports the following adjusted account balances, shown in alphabetical order, at the end of its fiscal year, February 28, 2020: Accounts payable $13,000 Income tax payable $4.550 Accounts receivable 28,000 Insurance expense 3,500 Accumulated depreciation cquipment 5.400 Prepaid insurance 2.500 Cash 18,000 Rent expense 6,000 Common shares 10,000 Retained varnings Depreciation expense 4.400 Salaries payable 3.000 Dividends declared 2,000 46,400 Equipment 23.150 Supplies 1,000 Fees earned 89.500 Supplies expense 4,000 Income tax expense 4.800 Utilities expense 21.000 Salaries expense (a) For each of the above items, indicate the type of business activity operating (O), investing (I), or financing (F). (b) Indicate whether each of the above items would increase (+)+) or decrease ( X ) cash. Assume all items are cash transactions. The first one has been done for you as an example. 19. The following list of accounts, in alphabetical order, is for Zen Inc. at May 31, 2019: Accounts payable $ 26,200 Accounts receivable 19.500 Bank loan payable 34,000 Buildings 100,000 2.400 During the year ended February 28, 2020, corrumon shares were issued for $5,000. Prepare (a) an income statement, (b) a statement of changes in equity, and (c) a statement of financial position. 18. Consider the following business activities. (a) Type of Activity 0 (b) Cash Effect Cash 20,000 Common shares 20,000 Equipment 30,000 Income tax payable 6,000 Inventory 18,000 Tand 44,00 Mortgage payable 97,500 Retained earnings 48,500 1. 2. Purchase of goods for resale Issue of common shares Sale of equipment that the company has finished using 3