Problem 5 Synchronizationism Company began operations on January 1, 2019. During the year ended December 31, 2020, the accounting records have been maintained on a double-entry basis. but the cash basis of accounting has been employed. The trial balance prepared from these records on December 31, 2020 appeared as follows: Debit Cash 1,500,000 Sales Purchases 2,000,000 Expenses 1,500,000 Equipment 200,000 Share capital Land 800,000 Building 1,500,000 Mortgage payable Retained earnings 7,500,000 Credit 4,000,000 2,000,000 900,000 600,000 7,500,000 It was decided to convert the accounting records to the accrual basis on December 31. 2020. Relevant information are as follows: 1) Accounts receivable as at December 31, 2019 and 2020 is P200,000 and P250,000, respectively. 2) The sales of 2019 included P40,000 deposited by a customer for merchandise to be delivered in 2020. 3) Accounts payable as at December 31, 2019 and 2020 is P350,000 and P280,000, respectively. 4) Accrued expenses as at December 31, 2019 and 2020 is P70,000 and P100000. respectively. 5) Merchandise inventory as at December 31, 2019 and 2020 is P150.000 and P210,000, respectively. 6) The purchases included P100,000 cash advance to a supplier for merchandise to be delivered in 2021. 7) The equipment was acquired on July 1, 2019. The estimated life is 10 years. 8) The land and building were acquired on January 1, 2019. The life of the building is 5 years. 9) it is estimated that 10% of the outstanding accounts receivable on December 31, 2020 may prove uncollectible. 10) The mortgage was on the land and building. It was obtained on September 1, 2020. The interest rate is 12% per annum payable semiannually on September 1 and March 1. The mortgage will mature after 4 years. Required: a) Adjusting entries to convert the records to accrual basis of accounting b) income statement c) Statement of nancial position