PROBLEM 4: CLASSROOM ACTIVITY The trial balance of Sunray Co. is shown below. The following are the year-end adjustments: 1. 2% of the total accounts receivable is doubtful of collection. 2. Depreciation for the year is not yet recognized. The equipment has a 10-year useful life. Sunray Co. uses the straight line method. 3. The notes payable was issued on September 30, 20x1. Interest of 10% is due annually. 4. Sunray rents its office space. Monthly rental of P2,000 is due at the end of each month. Sunray Co. has not yet paid its rent for the month of December 31, 20x1. Requirements: a. Prepare the year-end adjusting entries. b. Complete the worksheet below. 36 Chapter 1 Sunray Co. Work Sheet December 31, 201 Adatment Astral hence De Or De Income Statement Dr. Balance Sheet Du R o Aceite Cash Acounts receivable Inventory Equipment Accumulated den Accounts payable Notes payable Sun Ray, Capital Service fees Salaries experts Rent expense Total Adjur Bad debts expense Allowance of bad debts Depreciation expense Interest expense Interest payable Rent payable Total Ihrewste trebalance D 60,000 50,000 40.000 100,000 10,000 5,000 24.000 109,000 220,000 9,000 22.000 360,000 368.000