Question 1 70 marks ABC is an economic development corporation situated on XYZ First Nation. ABC has formed a company called ABC Band Limited and requires the financial statements to be prepared and analyzed for the year ended December 31, 2021. The following are the balances in the accounts at December 31 2020: Cash $507,000 Accounts Receivable $15,000 Inventory $5,000 Prepaid Rent $3,000 Equipment $40,000 Accumulated Depreciation - Equipment -$10,000 Land $50,000 Accounts payable $0 Long-term note payable, 5% $200,000 Common shares, 10,000 shares outstanding $350,000 Retained earnings $60,000 The following transactions and events occurred in 2021. Jan. 1 Jan. 1 Jan. 1 Apr. 1 Aug. 1 Sept. 1 Oct. 31 Dec. 30 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Paid cash of $4,000 for income taxes. Purchased additional land for cash of $30,000. Various operating expenses totaled $30,000. All were paid in cash except for $5,000 for utilities, which will be paid in January. All remaining accounts receivable were collected. Paid the annual dividend on the preferred shares, and a 5-cent dividend per common share. Paid the interest on the bank loan. Recorded depreciation for the new equipment. Issued $100,000 of 5% preferred shares for cash. Sold the equipment at its written-down value (book value) for cash. Acquired new equipment for $200,000 cash. The new equipment has an estimated useful life of 20 years and no expected residual value. Purchased inventory for $50,000 cash from ordinary suppliers. Made cash sales of $200,000. The related cost of goods sold was $50,000. CESD 2996A Winter 2022 Assignment 1 Chapters 1-6 Due Midnight February 16, 2022 Page 2 of 4 Question 1 (continued) Required (a) Using either journal entries or the transactions-based approach (tabular analysis), record the above transactions and events for 2021. (25 marks) (b) Prepare an income statement for the year 2021. (10 marks) (c) Prepare a statement of changes in equity for the year 2021. (5 marks) (d) Prepare a balance sheet as at December 31, 2021. (10 m