Question 1 (36 marks) The accountant for HK Co. prepared the following unadjusted trial balance on January 31, 2022, after one month of operations: Cash. Accounts Receivable. Credit Debit $ 5,700 4,500 Unexpired Insurance. 2,100 Office Equipment. 18,000 Unearned Consulting Fees. $ 3,300 Share Capital.. 15,600 Retained Earnings, 1 January 2022. 0 Dividends 3,300 Consulting Fees Earned 26,800 Salaries Expense. 7,700 Utilities Expense. 1,700 Rent Expense.... Supplies Expense Additional information items: 2,100 600 $45,700 $45,700 1) Consulting services rendered to a client but not yet recorded amount to $2,400 in January. The payment will be received at the end of February. 2) The company purchased an insurance policy on Jan. 1. Portion of insurance expiring in January amounts to $300. 3) Income taxes expense for January totals $2,500. Taxes will be paid next month. 4) The office equipment has an estimated useful life of 5 years. HK Co. use straight line method. Required a) What is the purpose of adjusting entries? (2 marks). Briefly explain the four types of adjusting entries. (1.5 marks each, total 6 marks) b) HK Co. adjusts its accounts monthly. Prepare the necessary adjusting entries on January 31. (Transaction descriptions are not required) (8 marks) c) Calculate Net Income for January and Retained Earnings on January 31. (No need to prepare income statement) (6 marks) d) Prepare monthly statement of financial position. (14 marks)