Q1 Rosy Ltd adopts perpetual inventory system and prepares its account to 31 December. The unadjusted trial balance of the company at 31 December 2017 is detailed below: 9. The estimated tax to be provided for the year was $20,000. 10. During the year, Rosy Ltd had issued 40,000 ordinary shares and it received a total amount of cash of $80,000. The company had made all relevant entries for the issuing of shares. 11. The following expenses should be classified according to the categories as shown below where annlicable: Required: a. Provide all journal entries necessary for the preparation of the 2017 financial statements for Rosy Ltd. Narratives are not required. (15 marks) b. Prepare the following financial statements for the year ended 31 December 2017 for Rosy Ltd in accordance with HKAS 1 (Revised) Presentation of Financial Statements: i. Statement of profit or loss and other comprehensive income (using a single-statement approach where expenses are classified by function). (12 marks) ii. Statement of Changes in Equity (columnar format). (5 marks) iii. Statement of Financial Position (using the Het Assets = Equity, i.e., A-L=E "classified" format). (14 marks) Additional information: 1. On 1 November2017, Rosy Ltd paid $7,200 for office rent covering the period from 1 November 2017 to 28 February 2018 at $1,800 per month. Rosy Ltd recorded the total payment in "Prepaid rent" account. 2. The company adopts the revaluation model for its freehold land. The revaluation reserve balance associated with the freehold land was at 1 January 2017. Entries for the current year revaluation exercise have not been recorded yet. The fair value of the "Freehold land" at 31 December 2017 was $873,000. 3. Included in "Inventories" were some inventories which were bought in year 2016 costing $29,000 and recorded at net realizable value of $23,500 on 21 December 2016. These inventories have still been kept in "Inventories" and have the estimated net realizable value of $30,000 on 31 December 2017 due to better economic outlook of the retail industry. 4. Included in "Inventories" of $15,000 were goods on consignment from Marry Ltd. Rosy wrongly recorded these goods as inventories purchased from Marry Ltd. 5. Depreciation for the "Equipment" has not been provided for the current year. It is the company's policy to use the cost model for the "Equipment". Included in "Equipment" was a newly acquired copier on 1 July 2017 at cost of $180,000. The equipment is depreciated at 10% per annum on cost on a straight-line method with no residual value (to the nearest month for additions during the year). 6. Rosy Ltd received from a customer $8,000 for an order with shipment term FOB destination and recorded this amount as "Sales" in November 2017. According to the records, Rosy Ltd shipped the goods on 30 December 2017 and accounting to $6,100 on the same day whereas the customer received the goods on 5 January 2018. 7. The "Allowance for bad debts" account at 31 December 2017 should be $7,250. 8. The "Loan payable" of $150,000 obtained from the bank on 1 January 2017 is repayable in three equal annual payments with the first payment due on 1 October 2018 . Interest of 6% per annum is to be paid annually with the first payment due on 1 October 2018