Question 3: Statement of Financial Position & Cash Flow Statement ( 36 The following Trial Balances for the Markham Corporation are below. The balances for the fiscal year end December 31, 2018 are final and based on the Audited Financial Statements The bookkeeper for Markham has prepared an unadjusted Trial Balance of the Balance Sheet accounts for the fiscal year ending December 31, 2019 Trial Balances for the Markham Corporation Unadjusted Final December 31, 2019 December 31, 2018 Cash $ 39,000 $ 25,000 Accounts Receivable 90.000 93,000 Less: Allowance for Doubtful accounts (6.000) (5.000) Prepaid Insurance 14,000 6,000 FV-NI Investments 26.000 26,000 Equipment 75.000 70,000 3 Less Accumulated Amort-Equipment Total Assets (13.000 225.000 Accounts Payable Unearned Revenue Long Term debt Common Shares Retained Earnings Total Liabilities & Equity $ 30,000 10,000 15.000 110.000 60.000 225,000 115.000 $200,000 $ 25,000 10.000 25,000 100.000 40.000 $200,000 The following additional information is provided and some entries have NOT been adjusted for in the December 31, 2019 trial balance. It is stated only if they have been adjusted, otherwise assume adjustments are required. 1. Upon reviewing the aged accounts receivable it has been determined that one account in the amount of $2,000 is uncollectible and needs to be written off as a bad debt. 2. Insurance is paid each June 30 the balance in the prepaid insurance represents the full year insurance amount 3. FV-N investments are long-term investments. The fair value of the portfolio investments at Dec 31, 2019 was $28,000 4. In reviewing the sales, it was determined that the balance in the uneared revenue account at Dec 31, 2019 should be $9.000 5. Long-term debt in the amount of 10,000 was retired by the issuance of common shares. This entry has been recorded and is reflected in the unadjusted trial balance of Dec 31, 2019 6. New Equipment was purchased, and equipment costing $25,000 with accumulated depreciation $5,000 was sold for $22.000. This entry has already been recorded and is reflected in the unadjusted trial balance of Dec 31, 2019 7. Dividends were paid in the amount of $5.000. This amount is reflected in the unadjusted trial balance of Dec 31, 2019 8. Assume. Net income after adjustments for the fiscal year ended Dec 31, 2019 is $20,000 Required: a) Prepare the journal entries for items 11 to 4 (4 marks) b) Prepare a statement of financial position based on your adjusted entries for items #1 to #4. (18 marks) c) Prepare a cash flow statement based on the above information using the indirect method (14 marks)