On an Excel sheet given, you will find the unadjusted trial balance for your firm as of December 31, 2021. Your job as controller is to use this trial balance and the data given for necessary year-end adjustments in order to create a corrected, adjusted trial balance and financial statements for your firm's bank. Required: a. Complete the adjusting entries that you determine are necessary, based on the data that you have been given. Record then in the general journal and on the worksheet You may use SA as the source (for supervisor approval). Show any computations necessary to justify the entries you make. You can use Excel to do this project. b. Extend, and complete the worksheet and determine net income BEFORE computing income tax expense (Part 14 below). Once you complete all entries before income tax expense, compute income tax expense, and create the journal entry for income tax expense, record the entry on the worksheet, extend the amount, and recompute net income. c. Prepare the combined statement of income and other comprehensive income. Assume that the number of common shares outstanding has not changed from the beginning to the end of the year. d. Prepare the balance sheet in perfect form. e. You do NOT have the data to create a statement of cash flows. It is not required. Data for Adjusting Entries: 1) The bank statement as of December 31, 2021 shows service charges of $240 and NSF checks for items recorded as sales in the amount of $3,400. Interest was shown earned in December is $2,420. 2) An aging schedule shows that $25,000 of the Accounts Receivable balance is likely to be uncollected. 3) The end-of-year inventory counts show a final balance of $245,000 in Merchandise Inventory and $14,000 in Supplies Inventory. 4) Rent for one year for the building was prepaid on September 1, 2021. No adjustments have been made since that time. 20% of the space is used by the Selling area, and 30% is used for production space. The rest is all used for administrative space. 5) The liability insurance policies were paid for two years coverage on July 1, 2021. 6) The investment trustee reports that $20,000 in dividends and $35,000 in interest were earned in the Debt Service Fund during 2021. 7) Unfortunately, there was a fire in part of the production area and some of the equipment was harmed. The non-discounted future cash flows related to this machinery (Cost $150,000 and Accumulated Depreciation 7) Unfortunately, there was a fire in part of the production area and some of the equipment was harmed. The non-discounted future cash flows related to this machinery (Cost $150,000 and Accumulated Depreciation $25,000) is estimated to be $100,000, and the fair value of the machinery is $105,000. 8) Depreciation is done using straight-line depreciation with no salvage. None has been taken for the year. Machinery and equipment is estimated to last for 10 years, and buildings are estimated to last for 20 years. 20% of the space is used by the Selling area, and 30% is used for production space. The rest is all used for administrative space. The machinery is 70% for production, 15% for administrative, and 15% for sales. 9) Finite-lived intangible assets are amortized over their legal lives with no salvage. Assume that they are all new in 2021 and that all legal years are remaining (years beyond the life of the author for the copyright). The patents are used in production. The copyright is used by the administrative area, and the trademark is used by the sales area to promote product. 10) Goodwill must be tested for impairment each year. It was first recorded when your firm purchased 60% of another firm. The Fair value of the entire subsidiary with goodwill is $700,000. The fair value of the entire subsidiary without goodwill is $600,000. 11) The derivatives are options purchased to protect the firm from loss. The derivatives served their purpose but no longer have any remaining value. 12) Only part of the interest expense on the note payable, mortgage payable, and bonds payable has been expensed for the entire year. Determine the correct amount of total interest expense for the year and accrue what is necessary. 13) The Board of Directors declared dividends for the common shareholders of $50,000 plus the amount due for the preferred shareholders. No dividends have been paid for the year 2021. 14) The income tax rate is 20%. Unadjusted Trial Balance Adjusting Income Balance Closing Entries Statement Sheet Entries Post-Closing Trial Balance ACCOUNT DR CR DR CR DR CR DR CR DR CR DR CR Cash 244000 Cash Equivalents 65000 Accounts Receivable 195000 Allowance for Doubtful Accounts 2500 Short-Term Investments 240000 Merchandise Inventory 285000 Supplies Inventory 25000 Prepaid Rent 90000 Prepaid Insurance 0 Long-Term Investment (60% ownership) 360000 Land for Future Expansion 400000 Debt Service Fund 950000 Land 400000 Machinery & Equipment Buildings Accumulated Depreciation Patents Copyright 4600000 3100000 542500 245000 123000 Goodwill 75000 Trademark 135000 Derivatives 50000 Deferred Tax Assets 240000 Deferred Pension Assets 230000 Accounts Payable 175000 Income Taxes Payable 95000 Sales Taxes Payable Dividends Payable 34000 0 Interest Payable 14000 Notes Payable (8% interest rate) 1000000 Mortgage Payable (5% interest rate) 850000 Bonds Payable (6% interest rate) 2500000 Common Stock (1.000.000 shares outstanding) 1000000 Preferred Stock (4%) 500000 Paid-in Capital in Excess of Par Common 1800000) Paid-in Capital in Excess of Par Preferred i 200000 Retained Earnings Accumulated Other Comprehensive Income 29000 Sales Revenue 9800000 Sales Returns & Allowances 37000 Sales Discounts 56000 Cost of Goods Sold Selling Expense General Administrative Expense 3517000 482200 2120000 Rent Expense Insurance Expense 136000 Research and Development Expense 120000 Impairment Expense Bad Debts Expense Interest Revenue Dividend Revenue Other Expense Interest Expense 95000 22000 35000 Income Tax Expense Gain/Loss on Derivatives Gain on Sale of investments Loss on Sale of Machinery TOTALS 23000 0 44200 18640700 18640700) 1) Recording the journal entries in the journal. (Tab 2 on the Excel sheet). 2) Recording the journal entry numbers on the worksheet except for the income tax entry. 3) Extend the worksheet, using the adjusting entries to create the balances in the adjusted trial balance column 4) Calculate net income by totaling the columns. 5) Use net income to calculate income tax expense. Journalize the entry for income tax expense in the journal and on the worksheet. 6) Income will recalculate. 7) Create an income statement, a statement of retained earnings, and a balance sheet as of December 21, 2021. 8) Prepare closing entries in the journal. 9) Put the closing entries on the Worksheet. 10) Extend the worksheet, and there should only be balance sheet accounts remaining (a post-closing trial balance).