Required:

1- Prepare the adjusting entries that have been made in Farah Company. (11 Marks)

2- Explain the differences between the adjusting entries and other journal entries. Also, explain why adjusting entries are needed. (3 Marks)

3- Prepare Farahs income statement for the year ended December 31, 2019. (2.75 Marks)

4- Prepare Farahs balance sheet as at December 31, 2019. (2.75 Marks)

Cash Accrued revenue Prepaid insurance (Prepayments) Office equipment Accu Depreciation Office equip. Accounts payable Interest payable (Accruals) Salaries payable (Accruals) Long-term notes payable Farah, Capital Farah. Withdrawals Consulting fees eamed (Revemes) Depreciation expense-Office equip Salaries expense Interest expense Insurance expense Rent expense Unadjusted Adjusted Trial Balance Trial Balance $ 47,640 $ 47,640 14.000 22.000 0 2.000 84.000 84.000 $ 14.000 $ 20,000 9.100 9.100 0 1.000 0 7.000 52.000 52.000 40.000 40.000 5.000 5.000 123.240 131.240 0 6,000 67,000 74.000 1.200 2.200 5000 3.000 14.500 14.500