Question 2 (40 marks) Berry Limited is a company incorporated in Hong Kong. It has its financial year end at 31 December. It is the company's policy to provide 8% of the annual sales amount as provision for bad debt. Below is the trial balance for the year ended 31 December 2020: Bank Accounts receivable Provision for bad debts Inventory Plant, property and equipment Accumulated depreciation Equipment Revaluation surplus at 1 January 2020 Accounts payable Sales Cost of sales Wages expense Tax expense Other operating expenses Share capital Retained profits at 1 January 2020 $ $ 900,000 700,000 350,000 600,000 1,390,000 60,000 300,000 80,000 1,500,000 400,000 100,000 20,000 80,000 1,000,000 900,000 4,190,000 4,190,000 The following information about Berry Limited had not been adjusted for: i One of the customers declared bankrupt on 28 December 2020. The amount owed by that customer was $300,000. ii Berry Limited had not made any adjustment for the bad debt provision for the year ended 2020. iii 500,000 ordinary shares were issued at $6 per share for cash on 10 November 2020. iv On 29 December 2020, Berry Limited received the bill from its auditor for the audit fee of $400,000 which would be due on 30 January 2021. V A piece of equipment increased in its fair value by $200,000 on 10 December 2020. Required: a Prepare journal entries (without narratives) for the transactions (i) to (v) necessary for the proper preparation of the financial statements. (18 marks) b Prepare: i the statement of profit or loss and other comprehensive income of Berry Limited for the year ended 31 December 2020. ii the statement of financial position of Berry Limited as at 31 December 2020. (22 marks)