The problem to be resolved:

Sapphire Gems and Minerals Co Ltd is a group of companies with six divisions within the Caribbean. Due to the illness of the companys Accountant, you have been asked to prepare the companys draft financial statements for submission to the Auditors for review and preparation of the consolidated financial reports. The trial balance for each division as of December 31, 2022, the end of the companys financial year is presented below. Having been exposed to the principles relating to Financial Accounting you are confident in your abilities to complete the task at hand.

The following are the information of each division/branch along with the surnames who are required to prepare the requirements as outlined:

1. Kunzite Division - students with the surname initial (A, P, I, E, and V).
2. Pearl Division students with the surname initial (C, O, R, and Y)
3. Opal Division - students with the surname initial (K, Q, M, and F)
4. Turquoise Division -students with the surname initial (S, W, G, and Z)
5. Tourmaline Division -students with the surname initial (D, T, L, and U)
6. Garnet Division -students with the surname initial (N, B, J, X, and H)

Sapphire Gems and Minerals Co Ltd - Kunzite Division

Trial Balance as of December 31, 2022

The following additional information is available December 31, 2022:

1. Store Supplies on hand on December 31, 2022, amounted to $800,000.
2. Insurance of $4,800,000 was paid on January 1, 2022, for the 15-monthsto March 31, 2023
3. Prepaid rent expired December 31, 2022, amounted to $3,000,000.
4. The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000.
5. The motor truck cost relates to two Livi Trucks purchased for $2,000,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the trucks depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 10,000 miles were driven, 16,500 in 2017, 12,600 in 2018, 16,000 in 2019, 16,500 in 2020, 14,800 in 2021 and 16,800 in 2022. The residual value on both truck is $419,430 each. On September 1, 2022, the company sold one of the trucks to Daley Company for $600,000 on credit. Round off answers to the nearest dollar.
6. Salaries earned by employees and not yet paid amounted to $80,000 on Dec 31, 2022.
7. Accrued interest expense as of December 31, 2022, $80,000.
8. On Dec 31, 2022, $2,600,000 of the previously unearned sales revenue had been earned.
9. The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $950,000.
10. A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $3,700,000 worth of inventory on hand at this point.

Other data:

1. The business is expected to make principal payments totalling $400,000 towards the loan during the fiscal year to October 31,2023

Required:

1. Prepare the necessary adjusting journal entries on Dec 31, 2022. [Narrations are not required]
2. Prepare the Adjusted Trial balance for the period ending December 31, 2022.

1. Prepare the following financial statements for the division:

• A Multiple-step income statement & a Statement of owners equity for the year ended December 31, 2022

A Classified balance sheet, in report format, at December 31, 2022

The following additional information is available December 31, 2022:

1. Store Supplies on hand on December 31, 2022, amounted to $300,000.
2. Insurance of $3,400,000 was paid on January 1, 2022, for the 17-monthsto May 31, 2023
3. Prepaid rent expired December 31, 2022, amounted to $1,500,000.
4. The furniture and equipment have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000.
5. The motor truck cost relates to two Livi Trucks purchased for $800,000 each by the company on January 1, 2016. The double-declining balance method of depreciation is used to compute the trucks depreciation charges and their expected useful life is 10 years or 100,000 miles. In 2016, 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $167,772 each. On September 1, 2022, the company sold one of the trucks to Daley Company for $200,000 on credit. Round off answers to the nearest dollar.
6. Salaries earned by employees and not yet paid amounted to $55,000 on Dec 31, 2022.
7. Accrued interest expense as of December 31, 2022, $25,000.
8. On Dec 31, 2022, $350,000 of the previously unearned sales revenue had been earned.
9. The aging of the Accounts Receivable schedule on Dec 31, 2022, indicated that the Allowance for Bad Debts should be $200,000.
10. A physical count of inventory was done on December 31, 2022, after making all the other adjustments and this revealed that there was $4,300,000 worth of inventory on hand at this point.

Other data:

1. The business is expected to make principal payments totalling $150,000 towards the loan during the fiscal year to November 30,2023