Question 1 (40 marks) A- Tracy Underhill operates as a sole trader. Below is a trial balance extracted from her books as a 31 December 2017 Trial balance for Tracy Underhill as at 31 December 2017 RE Additional information is provided for use in preparing the company's adjustments: The value of closing inventory is 102.500 2 Interest is payable on the bank loan at eight per cent per annum. The annual amount due at 31 December 2017 had not yet been paid Tracy has paid her rent until 31 March 2018. Her annual rent is 24,000 Office equipment has a useful life of ten years and a residual value of 0. It is to be depreciated on a straight-line basis. The motor vehicle with a useful life of ten years and an estimated residual value of 30,000 is to be depreciated on a straight-line basis at a rate of 10% Tracy finds that receivables of 10,000 need to be wrimen off as irrecoverable. The allowance for receivables is to be set at ten per cent of the remaining outstanding receivables as at 31 December 2017. The heating bill will arrive on January and about 1,000 is expected to relate to the periodil 31 December Required: Make the end-of-period adjustments entries (11 Marks) Prepare Tracy's income statement for the year ended December 31, 2017 Marks) Prepare Tracy's balance shoetas December 31, 2017 (10 Marks) B-What will be the effect on financial statements if an accrued expense is not recorded at the end of the year marks) - On June 30 of the current calendar year. Apricot Co, paid S9.500 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to expect the time of cash payment Required: 1. Prepare the adjusting entry on December 31 for Apricot Co. 2. Show the effect of the adjusting entry on Income statement and balance sheet at the end of the Current calendar year (6 marks)