Question 3.2 (Total: 22 marks, 2 marks each) For each of the items listed below, indicate how it should be treated in the financial statements. Use the following letter code for your selections: a. Ordinary item on the income statement b. Discontinued operations c. Unusual item on the income statement d. Adjustment to prior year's retained earnings 1. The bad debt rate was increased from 19 to 24 of sales, thus increasing bad debt expense. 2. Obsolete inventory was written off. This was a material amount, and the first loss of this type In the company's history. 3. An uninsured earthquake loss was incurred. This was the first loss of this type in the company's history. 4. Recognition of revenue earned last year, inadvertently omitted from last year's income statement 5. The company sold one of its warehouses at a loss 6. Settiement of a court case involving the federal government related to income taxes of three years ago. The company is continually involved in various adjustments with the federal government related to its taxes. 7. A loss incurred from expropriation - the company-owned resources in South America which were taken over by a dictator unsympathetic to Canadian business interests. 2. The company failed to record depreciation in the previous year. 9. Discontinuance of all production in Canada. The manufacturing operations were relocated to Honduras. TO. LOSS on sale of investments. The company last sold some of its investments two years ago 11. Lots on the disposal of a segment of the business Star Finder Inc. has provided the following information for the year ended December 31, 2021: Prank sombody with the fake Windows 10 upgrade screen which never ends. Open the site in a web browser and go full screen with the F11 key Sales revenue 51,300,000 Loss on inventory due to decline in net realizable value $80.000 Unrealized gain on FV-OCI equity 42.000 Loss on disposal of equipment 35.000 Investments Interest income 7.000 Depreciation expense related to buildings omitted by mistake 55,000 in 2020 Cost of goods sold 780.000 Retained earnings at December 31, 2020 980.000 Selling expense 65.000 Loss from expropriation of land 60,000 Administrative expense 48.000 Dividends declared 45,000 Dividend revenue 20.000 The effective tax rate is 25% on all items. Star Finder inc. prepares financial statements in accordance with IFRS. The FV-Oci equity Investments trade on the stock exchange. Gains/losses on FV-oci investments are not recycled through net income Required: 1. Prepare a multi-step statement of financial performance for 2021, showing expenses by function. Ignore calculation of EDS. 2. Prepare the retained earnings section of the statement of changes in equity for 2021. 2. Prepare the journal entry to record the depreciation expense omitted by mistake in 2020