SECTION B (70 marks) Answer ALL questions from this section. QUESTION 1 (18 marks) Long River Company had the following transactions during the month of January (1) Paid $5,000 cash for supplies, of which S600 was used during January, and $4,400 will be used during February through April (ii) Paid S24.480 for salaries, one-half of which employees had earned in December and one- half of which related to January, (iii) Purchased S36,000 of equipment, made an $8,000 down payment and signed a note payable for the balance. (iv) Made payment of $4,800 on the amount owed for equipment. (v) Prepaid insurance of $1,500 has been expired in January (vi) Previously received uneamed sales revenue of $60,000 has now been earned. Required: (a) Prepare the journal entries and adjusting entries based on the information above. (Explanation of the journal entry is not required) (15 marks) (b) Compute the balance in the Cash account at the end of January. Assume the beginning balance of the Cash account as at January 1 is S65,000 (debit balance). (2 marks) (c) Compute the balance in the Notes Payable account at the end of January. Assume there is no beginning balance of the Notes Payable account as at January 1. (1 marks) QUESTION 2 (30 marks) The adjusted trial balance for Wisdom Company, as of December 31, 2019, is shown below: Wisdom Company Adjusted Trial Balance As at December 31, 2019 Dr 19,800 44,800 22,600 21,000 2.000 44,000 35,580 2,400 Accounts receivable Machinery Cash Accumulated depreciation - Machinery Depreciation expense - Machinery Rental expense Salary expense Electricity expense Accounts payable Notes payable Interest payable Share Capital Retained earnings as at January 1, 2019 Marketing revenue Dividends Supplies Uneamed marketing revenue Supplies expense Interest expense 3,500 30,000 3.980 10,000 23,000 110,000 20,000 35,000 28,250 1.250 2,300 229,730 229,730 Required: (a) Prepare the Income Statement of Wisdom Company for the year ended December 31, 2019. (9 marks) (b) Prepare the Statement of Retained Earnings of Wisdom Company for the year ended December 31, 2019. (6 marks) (c) Prepare the Statement of Financial Position of Wisdom Company as at December 31, 2019. (15 marks)