Question 1 (60 marks) The following unadjusted trial balance was extracted from the accounting records of Nick Yip's business at the end of its financial year on 31 December 2021 Trial Balance as at 31 December 2021 Debit Credit Sales revenue $1,400,000 Equipment, at cost $550,000 Delivery expenses 54.200 Accumulated depreciation - equipment, 1 January, 2021 210,000 Inventory, 1 January 2021 100,000 Purchases 884,310 Accounts receivable 180.000 Accounts payable 60,500 Salaries expenses 264,490 Nick Chan, withdrawals 76,800 Rent and rates expenses 103,600 Supplies expenses 40,100 Sales discounts 8.860 Nick Chan, capital, 1 January 2021 400.000 Purchase returns and allowances 27,210 Sales retums and allowances 11.000 Supplies 5,500 Cash 14,150 Unearned sales revenue 171,300 Purchase discounts 24.000 52.293.010 52.293.010 The following information as at 31 December 2021 is available: (1) Inventory on 31 December 2021 had a cost of $58,800. (2) Rent owing amounted to $7,640. (3) Rates prepaid for the first quarter of the next financial year was $600 per month This amount paid was previously debited to Rent and Rates Expenses account (4) Depreciation on equipment for the year. $55,000. (5) Unearned sales revenue earned during the year. $36,500. (6) Supplies on hand amounted to $$4,300, (7) Accrued sales revenue amounted to $6,000. (8) $8,530 of freight-in on purchases was included in delivery expenses Required: (a) Prepare journal entries for the above adjustments (2) to (7). Journal narrations are not required. (20 marks) (b) Prepare an income statement for the year ended 31 December 2021. (20 marks) (c) Prepare a balance sheet (classified) as at 31 December 2021. (20 marks)