Nour Youssef operates as a sole trader. Below is a trial balance extracted from her books as at 31 December 2020.

Trial balance for Nour Youssef as at 31 December 2020

	Debit	Credit
	_ .
Sales revenue		685,000
Inventory (as at 1 January 2020)	95,800
Purchases	624,200
Non-current assets at cost:
Equipment	100,000
Motor vehicle	110,000
Accumulated depreciation:
Equipment		20,000
Motor vehicle		10,000
Insurance	14,700
Rent	30,000
Heating and lighting	10,000
Salaries and wages	40,000
Motor expenses	15,300
Miscellaneous expenses	28,000
Receivables	100,000
Allowance for receivables		4,000
Payables		100,0 00
Cash	71,000
Bank loan		100,000
Capital		320,000
Total	1,239,000	1,239,000

Additional information is provided for use in preparing the companys adjustments:

1. The value of closing inventory is 90,000.
2. On November 1, Nour Company borrowed 100,000, at 6% annual interest, from the National Bank. Nour has 120 days before the first payment is required.
3. Nour has paid her rent until 31 May 2021. Her annual rent is 24,000.
4. Office equipment has a useful life of ten years and a residual value of 0. It is to be depreciated by 20% on reducing balance basis.
5. The motor vehicle has a useful life of eight years and an estimated residual value of 30,000.
6. Nour finds that receivables of 8,000 need to be written off as irrecoverable.
7. The allowance for receivables is to be set at ten per cent of the remaining outstanding receivables as at 31 December 2020.
8. The heating bill will arrive on 7 January and about 3,000 is expected to relate to the period until 31 December.

Required:

1. Make the end-of-period adjustments entries
2. Prepare Nours income statement for the year ended December 31, 2020.
3. Prepare Nours balance sheet as at December 31, 2020.
4. How do the adjusting entries differ from other journal entries?? Explain why adjusting entries are needed.