QUESTION 2 [77 points; 45 minutes] Preparation of journal entries and financial statements Deana World Inc. manufactures and sells t-shirts. The Company reported the following accounts and balances in its unadjusted trial balance as at December 31, 2019. Note that the accounts are listed in alphabetic order. I Accounts payable Accounts receivable Accumulated depreciation Cash Cost of goods sold Equipment, at cost Investments (long-term) Merchandise inventory Other revenues Note payable, due March 1, 2021 Prepaid insurance Rent expense Retained earnings, Jan. 1, 2019 Salaries expense Sales revenue Share capital (1,000 shares) Supplies Unearned revenue 30,000 30,600 16,000 21,000 168,000 68,800 37,000 27,500 7,700 35,000 1,800 13,850 29,550 30,500 229,850 50,000 2,050 3,000 All of the above accounts have "normal" debit and credit balances, as defined in the textbook. Additional information available at year end: a) The company declared cash dividend of $1.50 per share on December 31, 2019. The dividend is to be paid in January 2020. b) of the unearned sales revenue, a total of $2,400 was earned by December 31. The cost of goods sold related to this revenue is $1,500. c) The balance in Prepaid insurance represents the cost of a one-year insurance policy purchased on September 1. The policy was effective on that date, and the monthly insurance premium is constant. d) The Equipment has a useful life of 8 years and $4,800 residual value. e) A physical count of supplies at December 31, 2019 showed that the cost of supplies on hand was $950. f) The note payable was signed on March 1, 2019. Interest on the note is 6 percent and it is payable annually on March 1. 8) The company is subject to a 30% income tax rate. 4