The following unadjusted trial balance is for Ali Al Bad PharmaHealth Company as of the end of its April $30,2022,$ fiscal year. The company retails human medicines but also provides consulting services to clients in a small rural town in Abu Dhabi.

Ali Al Bad PharmaHealth Company

Unadjusted Trial Balance

April $30,2022$

Account Dr Cr

AED AED

Cash $700,000$

Supplies $160,000$

Accounts receivable $800,000$

Inventory $2,200,000$

Prepaid insurance $120,600$

Equipment $2,000,000$

Accumulated depreciation $140,000$

Accounts payable $68,000$

Notes payable $300,000$

Ali Al Bad Capital $860,000$

Ali Al Bad, withdrawals $120,000$

Consulting fees $2,503,600$

Sales $3,000,000$

Wages expense $414,000$

Interest expense $33,000$

Rent expense $132,000$

Property taxes expense $97,000$

Repairs expense $47,000$

Utilities expense $48,000$

The following additional information was provided at year end:

$1.$ The April $30,2021,$ credit balance of the owner$$s capital account was AED$460,000,$ and

the owner invested AED$400,000$ cash in the company during the $2022$ fiscal year.

$2.$ The April $30,2022$ inventory balance is AED$800,000.$

$3.$ From experience, $3\%$ of accounts receivable are uncollectable. All sales are on credit.

$4.$ The supplies available at the end of fiscal year $2022$ had a cost of AED$70,000.$

$5.$ The cost of expired insurance for the fiscal year is AED$100,000.$

$6.$ The equipment was bought two years ago. It has a useful life of $20$ years and a residual value of $$600,000.$

$7.$ The April utilities expense of AED$8000$ is not included in the unadjusted trial balance because the bill arrived after the trial balance was prepared.

$8.$ The company$$s employee wages of AED$20,000$ for April would be paid after the fiscal year$-$end.

$9.$ Rent is paid up for one year which ends one month after the end of the fiscal year$-$end.

$10.$ Additional property taxes of AED$5,500$ have been assessed for this fiscal year but have not been paid or recorded in the accounts.

$11.$ The long$-$term note payable bears interest at $12\%$ per year. The interest for April has not yet been paid or recorded.

Required

$1.$ Prepare journal entries to record the above adjustments. Prepare a worksheet to show the effect of these adjustments on the income statement and balance sheet.

$2.$ Post the above journal entries to the ledger and prepare an adjusted trial balance.

$3.$ Prepare journal entries to close the temporary balances and prepare the post$-$closing trial balance.

$4.$ Prepare the following financial statements as at end of the fiscal year:

a$.$ Income statement

b$.$ Statement of changes in equity c$.$ Statement of financial position

$5.$ Compute two appropriate ratios each to assess the following aspects of Ali Al Bad Car

Wash Company:

a$.$ Profitability b$.$ Liquidity

c$.$ Solvency

$6.$ Explain what each of the ratios you computed indicates about each of the three aspects of Ali Al Bad$$s performance above.