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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 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

Less: Accumulated Amort.- Equipment (13,000) (15,000)

Total Assets 225,000 $200,000

Accounts Payable $ 30,000 $ 25,000

Unearned Revenue 10,000 10,000

Long Term debt 15,000 25,000

Common Shares 110,000 100,000

Retained Earnings 60,000 40,000

Total Liabilities & Equity 225,000 $200,000

The following additional information is provided and has NOT been adjusted for in the December 31, 2019 trial balance

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 30th the balance in the prepaid insurance represents the full year insurance amount.

3. FV-NI 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 unearned 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 and the Retained earnings amount after adjustments is now $58,000 for the final statement of financial position.

Required:

a) Prepare the journal entries for items #1 to #4

b) Prepare a statement of financial position based on your adjusted entries for items #1 to #4.

c) Prepare a cash flow statement based on the above information using the indirect method

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