Scenario: You have been hired as an accountant by Russell Industries on December 31, 2023. Upon arriving on your first day, you are handed a trial balance by the CEO. Russel Industries Trial Balance December 31, 2023 Cash Accounts Receivable Debit Credit $1,082,000 1,295,000 Allowance for Expected Credit Losses $13,000 Prepaid Expenses 11,000 Inventory 454,330 Equipment 66,000 Accumulated Depreciation - Equipment 26,400 Building 516,000 Accumulated Depreciation - Building 103,200 Land 150,000 Long-term investments 10,000 Accounts Payable Salaries Payable Bank Loan Payable Share Capital Retained Earnings 138,000 14,000 200,000 1,000 2,586,230 Dividends Declared 16,000 Sales Revenue 2,800,000 Sales Returns and Allowances 224,000 Purchases 1,300,000 Insurance Expense 24,000 Interest and Bank Charges Expense 5,500 Salaries Expense 728,000 $5,881,830 $5,881,830 After reviewing the trial balance and other accounting records you discover the following: a) The company uses a periodic inventory system with a FIFO cost flow method. A count of inventory on December 31st showed 97,000 units on hand. Russell Industries only sells one product. b) Below is a summary of the inventory purchases for the year ended December 31, 2023 Date Jan 15 Mar 22 July 19 Sept 30 Nov 16 Units 66,000 14,000 106,000 35,640 82,000 Cost/Unit 4.44 4.24 4.16 4.00 4.44 c) 40,000 units of inventory were shipped by the supplier on December 31, 2023 fob shipping point at a cost of $172,800. Insurance for the inventory while in transit costs $3,449. This shipment is not included in the above listing, or the physical inventory count. No adjustment has been recorded for this purchase. d) The CEO provides the following collectability information for accounts receivable. He also mentions that included in the over 120 days balance is $52,000 owing from a company that has since gone bankrupt. No collection is expected. Age Under 60 days 61-90 days 91-120 days Over 120 days Balance $767,000 $435,000 $27,000 $66,000 Estimated collectible % 92% 88% 80% 44% No adjustments have been recorded to the allowance for doubtful accounts. e) Bank fees of $472 for the month of December have not been recorded. Outstanding cheques total $34,000 and there is an outstanding deposit of $15,000. The bank made an error when cashing a cheque on December 15th. The cheque was written for $625 but cashed for $652. The bank account balance per the bank statement is $1,100,501 at December 31st. f) Annual depreciation of $6,600 on the equipment and $20,640 on the building has not yet been recorded. g) The bank loan payments are as follows: a. May 31st, 2024 - $50,000 b. November 30, 2024 - $50,000 c. May 31, 2025 - $50,000 d. November 30, 2025 - $50,000 Prepare Russell Industries income statement and statement of changes in equity for the year ended December 31, 2023. Prepare a classified statement of financial position as at December 31, 2023. Prepare the closing entries for the year ended December 31, 2023. Prepare the post-closing trial balance. It was discovered that the ending inventory count missed 5,000 units of inventory. Discuss how this error would impact the financial statements