Question 11 Scholes Shoes Ltd, is a retailer of kid's school shoes and they have produced the followi unadjusted trial balance: Scholes Shoes Ltd Trial Balance as at December 31, 2018 A/C Name L DR CR Cash 1,500,000 Accounts receivable 1,200,000 Allowance for bad debt 100,000 Merchandise Inventory 400,000 Store Supplies 90,000 Prepaid Insurance 1,600,000 Building 10,000,000 Accumulated depreciation - Building 3,000,000 Fixtures and Fittings 1,200,000 Accumulated depreciation Fixtures and Fittings 240,000 Accounts payable 900,000 Wages payable Mortgage 2,500,000 Scholes', Capital 6,500,000 Scholes', Withdrawals 150,000 Sales revenue 7,305,000 Sales discount 65,000 Sales returns and allowances 130,000 Cost of goods sold 3,000,000 Wages Expense 1 870,000 Insurance Expense Depreciation Expense - Building Depreciation Expense - Fixtures and Fittings Supplies Expense 70,000 Utilities Expense 180,000 Bad Debt Expense 65,000 Travelling Expense 25,000 Interest Expense 20,545,000 20,545,000 The following additional information was made available at December 31, 2018 a) Insurance of $1,600,000 was paid on January 1, 2018 for the period January 2018 to April 2019. Code ACGT 1002 ... /2019 Page 5 b) The company's building has an estimated life of ten (10) years and is being depreciated on the straight-line method of depreciation, down to a residual value of $0. c) The fixtures and fittings are being depreciated over ten (10) years on the double-declining method of deprecation, down to a residue of $128,849. d) Wages earned by the company's employees and NOT paid at December 31, 2018 amounted to $130,000 e) A physical count of inventory at December 31, 2018, reveals $405,000 worth of inventory on hand. f) The aging of the accounts receivable schedule at December 31, 2018 indicated that the estimated uncollectible on accounts receivable is $120,000. Required: 1. Prepare the necessary adjusting entries on December 31, 2018 (5 Marks) 2. Prepare the company's Multiple-step Income Statement for the year ended December 31, 2018. (9 Marks) 3. Prepare the company's Statement of Owner's Equity for the year ended December 31, 2018 (2 Marks) 4. Prepare the company's classified Balance Sheet at December 31, 2018 (14 Marks) 1 2010