Question 2 The year is 1454 and you are now happily working as a book keeper for Frederico Farfalle who is paying you much more than Leonardo. You have produced the following trial balance for Frederico based on his transactions for the year. Although it is New Year's Eve, Frederico expects you to stay late and prepare him an income statement and a statement of financial position to give to his bank manager the next morning. Your trial balance at 31 December 1454 is as follows: Debits Credits 450,000 17,300 5,500 6,700 Account Name Sales Opening Inventory Accounts receivable Accounts payable Cash at bank Purchases Buildings Ship Equipment Long term bank loan Wages and salaries Repairs and maintenance Interest payable Admin expenses Capital at 1st Jan 1454 12,500 235,000 125,000 55,000 23,000 54,000 89,000 17,800 2,000 31,000 102,400 613,100 613,100 Luckily, you realised that you have made a mistake and recorded a credit sale of 15,000RE as 10,000RE. You also found that a bill for ship repairs of 3,000RE has just arrived and not been recorded in the accounting records. Finally, visiting the warehouse, you noticed that closing inventory at 31st December 1454 of 22,000 must also be taken into account. Using the trial balance and taking into the account the adjustments noted above you must: a) Identify the journal entries required for the adjustments noted above; (3 marks) b) Prepare an income statement for the year ended 31 December 1454; (8 marks) c) Prepare a statement of financial position (balance sheet) as at 31 December 1454. (9 marks) Total of 20 marks