On October 1, 2020, Jack and Jill decided to start a T-Shirt screening and retail business. They each invested $50,000 in exchange for 10,000 shares in their new business, Extreme T-Shirts Limited. During the three months from October 1 to December 31, the date that they chose to end their fiscal year, the following transactions occurred: 1. On October 1, they found premises for their plant and paid the landlord $12,000, for six months' rent in advance. 2. On the same date, they signed a 5 year Promissory Note at their bank for $100,000 for equipment. The terms of the Note require interest payments on the anniversary date of the Note at 6% and principal payments of $20,000 each, also on the anniversary date of the Note. 3. During October, they acquired $125,000 worth of equipment, with a useful life of ten years. 4. They decided that the equipment would be depreciated using the double declining balance method, with a full month's depreciation in the month of acquisition and no depreciation in the month of disposal. This amounted to $6,250 for the current year. 5. They paid a full year of insurance at the rate of $300 per month. 6. During the three month period from October 1 to December 31, they acquired $50,000 worth of T-Shirts and Materials on account to make their final product. 7. They hired three people to work in the plant and between the period that they hired them and the end of December, they paid them $18,000. 8. During the three month period, they paid Utilities and other operating expenses of $15,000. 9. During the three months, they generated revenues of $125,000, all on credit. 10. During the three months, they collected 75% of their receivables. 11. During the three months, they paid $47,500 to their suppliers. 12. Neither Jack nor Jill took any salary from the business, but on December 31 they paid themselves a dividend of $5,000 each. 13. On December 31, they counted Inventory and found that there was $5,632 worth of T-Shirts and supplies on hand. 14. They determined that 1% of credit sales would be an appropriate Allowance for Doubtful Accounts. 15. On December 31, they owed their employees $2,500 in unpaid wages. 16. The company is subject to a 40% income tax rate. Required: a) b) c) d) e) Using the Q-T Method, post the transactions as outlined above; Post all required adjusting entries at the end of December; Close the books at the end of December; Prepare an Income Statement; Prepare a Balance Sheet