Prepare the following: 1. The journal entries 2. The ledgers 3. The trial balance 2 Describe the accounting function and give an outline of the four financial statements. 3 Examine the contents and the structure of the statement of income and the statement of comprehene income, the statement of changes in equity, and the statement of financial position. EXERCISE 2: PREPARING THE STATEMENT OF INCOME At the end of December 31, 2012, Cougar Inc.'s accounts are as follows: Office salaries Finance costs Depreciation (administration) Cost of sales Income tax expense Sales salaries Interest income $30,000 3,000 2,000 300,000 35,000 40,000 6,000 Gross revenue 520,000 Advertising 10,000 Lease (administration) 3,000 Promotional expenses 2,000 Sales discounts 20,000 Travel expenses 3,000 5,000 Rental charges Question Prepare Cougar's statement of income for the year ended December 31, 2012. EXERCISE 3: DEPRECIATION AND CAPITAL COST ALLOWANCE On its statement of financial position, a company shows buildings purchased $700,000, equipment purchased for $350,000, and machinery purchased for $170, The depreciation and capital cost allowance rates for these non-current assets at follows: Straight-Line Deprecia 1. Buildings 2. Equipment 3. Machinery Capital Cost Allowance 5% 20% 15% 7% 25% 30% Question For the first five years of operation, calculate the amount of depreciation and ca cost allowance for the non-current assets.