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On 31 December 20X5, the Hearth & Stove Corp. is preparing financial statements. The following unadjusted trial balance has been prepared HEARTH & STOVE CORP

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On 31 December 20X5, the Hearth & Stove Corp. is preparing financial statements. The following unadjusted trial balance has been prepared HEARTH & STOVE CORP Trial Balance Debit Credit Accounts payable S 66,450 Accounts receivable S 316,635 Advertising expense 19,200 Accumulated depreciation-office equipment 59,700 Allowance for doubtful accounts 6,750 Cash 25,200 Cost of goods sold 990,000 Common shares 67,500 Dividends declared 15,600 Insurance expense 2,700 Interest expense 3,960 Interest revenue 1,260 75,000 Land 217,500 Long-term investments 468,900 Mortgage payable 445,500 Notes payable-short term 16,200 Office equipment 108,000 Office expense 19,650 Prepaid insurance Retained earnings, opening 68,730 Revenue received in advance 52,200 Sales 1,833,000 Supplies inventory 600 Supplies expense 6,300 Miscellaneous expense 23,145 Rent expense 108,000 Wages expense 216,900 $2,617.290 The following facts are also available at the end of 20xs: a. The inventory on hand is S70,050 according to the physical count. b. The allowance for doubtful accounts should have a balance of 58,400. C. The office equipment is depreciated at a rate of 8% per year (straight-line). d. There are supplies of $1,800 on hand. e. On 31 March of this year, the company bought a $2,700 insurance policy with a 12-month term. f. Customers have not yet been billed for products delivered on the last day of the year. The products have a retail value of $81,000. The cost of goods sold for this transaction was properly recorded. g. Income tax is estimated to be 30% of all earnings before income tax. No income tax has been recorded or paid. Required: 1. Prepare adjusting journal entries to reflect the information in (a) to (g) above. 2. Prepare a statement of changes in equity in good form that reflects the trial balance above and your journal entries. There were no changes to common shares during the year 3. Prepare a classified SFP in good form that reflects the trial balance above and your journal entries

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