P4-7 Recording Adjusting and Closing Entries, Preparing a Statement of Earnings Including Earnings per Share, and Preparing a Statement of Financial Position (AP4-7) It is your first day on the job as a trainee for an entry position in the accounting department of Alimex Inc., a merchandising company. The company controller provides you with the following unadjusted trial balance as at December 31, 2017, with accounts listed in alphabetical order. Debit Credit $ 33,000 $100,000 9,000 11,000 60,000 129.000 11,240 Accounts payable Accounts receivable Accumulated depreciation equipment Cash Contributed capital (15,000 shares) Cost of sales Deferred revenue Equipment, at cost Merchandise inventory Other operating expenses Note receivable, due December 31, 2018 Prepaid income taxes Prepaid rent Rent expense Retained earnings, January 1, 2017 Sales revenue Wages expense 60.000 18.200 1,400 24,000 1,040 16,800 11,000 70,000 301,000 111,800 $484,240 $484,240 Additional information is as follows: a. Wages owed to employees totalled 88,000 as at December 31, 2017 1. The note receivable was obtained by Alimex on September 1. 2017. The note carries an annual interest rate of 5 percent, payable to Alimex at maturity only. The balance in prepaid rent represents a payment August 1, 2017 for 12 months of rent, bevrinning on that date. d. The equipment has a useful life of 20 years. Depreciation expense for 2017 was estimated at $3,000 c. Cash dividends of $1 per share were declared on December 31, 2017, payable on January 25, 2018. S. The company is subject to an income tax rate of 20 percent. Income taxes are due March 15, 2018 Journal entries related to these transactions have not been recorded yet. Required: 1. Prepare in proper form the adjusting journal entries as at December 31, 2017, for items (a) through above. Create new accounts, if necessary. (Hint: complete requirement 2 before making the adjusting entry related to item .) 2. Show the effects (direction and amount) of the adjusting entries on net earnings and cash 3. Prepare a multiple step statement of earnings for the year ended December 31, 2017. Alimex did not issue or repurchase any shares during 2017 Prepare a classified statement of financial position as at December 31, 2017. 5. Prepare the closing entries at December 31, 2017. 6. Compute the net profit margin ratio and total asset turnover for 2017, and explain the meaning of each ratio. Total assets equalled $200,000 at January 1, 2017