Question 2: (25 marks): Sainsbury retail store is maintaining its accounts on a calendar year basis. The business adjusts and closes its accounts at the end of the year. On December 31, 2020, the following balances appeared in the Un-Adjusted trial balance: Prepaid insurance Unearned Sales revenue Office Buildings Accumulated depreciation, Office Buildings Land Accounts receivable Salaries expense Trading investments Interest expense Notes payable (Long Term) Accounts payable Patents Non - Trading Investments Cost of Goods Sold Interest Revenue Dividends Share Capital Rent Revenue Advertising expense Cash Selling Equipment Accumulated depreciation, Selling Equipment Notes receivable Loss on sale of Equipment Office Supplies Rent expense Sales Revenue Donations paid Salesmen Salaries expense Utilities expense Retained Earnings Merchandise Inventory 15,000 25,000 180,000 15,000 150,000 100,000 70,000 20,000 10,000 50,000 40.000 100,000 25,000 500,000 20.000 4,000 500,000 10,000 10,000 110,000 100,000 10,000 40,000 2,000 9,000 15,000 800,000 5,000 10,000 10,000 40,000 25,000 Additional Information: 1. iv. The amount in the prepaid insurance represents a 5-year insurance policy that started 1 October 2020. An inventory of Office supplies on 31 December 2020 revealed that office supplies used amounted to $9000. The Office Building has an estimated useful life of 40 years, residual value $10,000 and depreciation is calculated using the straight-line method. The Selling Equipment has an estimated useful life of 10 years, residual value $5,000 and depreciation is calculated using the Double Declining balance method. The amount credited to the unearned Sales revenue in the unadjusted trial balance represent advance payment for a 5-year service contract that started 1 April 2020. Accrued Salesmen Salaries at the end of the year, $10,000. Estimated Income taxes for the year, $ 30,000. V. vi. vii. Required: Prepare a Classified Income Statement for Sainsbury retail store for the year ended 31 December 2020