The Reed Company has fiscal year on December 31 and its financial statements are prepared on an annual basis. However, the accounting records are damaged accidently. For the fiscal year ended on December 31, 2020, only the unadjusted trial balance and the statement of financial position on December 31 are currently available. Please try to restore other parts of the accounting records using the currently available information. The change in Accounts Receivables totally comes from providing service to customers. Unadjusted Trial Balance Accounts Payable 7,000 Accounts Receivable 1,540 Accumulated Depreciation-Equip. 9,100 Cash 42,000 Depreciation Expense 0 Dividends 7,700 Equipment 52,500 Insurance Expense 0 Prepaid Insurance 12,460 Prepaid Rent 10,500 Retained Earnings 36,540 Rent Expense 0 Salaries and Wages Expense 26,600 Salaries and Wages Payable 0 Service Revenue 67,200 Share Capital-Ordinary 21,000 Supplies 2,240 Supplies Expense 1,400 Unearned Service Revenue 16,100 Reed Company Statement of Financial Position December 31, 2020 Assets Property, plant, and equipment Equipment... $ 52,500 Less: Accumulated depreciation equipment (11.900) $ 40,600 Current assets Prepaid insurance 1,050 Prepaid Rent. 7,000 Supplies 490 Accounts receivable 2,240 Cash....... 42.000 52.780 Total assets. $93.380 Equity and Liabilities Equity Share capital-ordinary. $21,000 Retained earnings.. 49.980 $70,980 Current liabilities Accounts payable. 7,000 Unearned Service Revenue 10,500 Salaries and Wages payable. 4,900 22.400 Total equity and liabilities $93,380 Required: (a) Based the information given above, prepare adjusting entries for the Reed Company on December 31, 2020. You may omit descriptions for the journal entries. (7 marks) (b) Based on the information given above, prepare the income statement for Reed Company on December 31, 2020. (4 marks) (c) Based on the information given above, prepare the closing entries for the Reed Company on December 31, 2020. You may omit descriptions for the journal entries. (4 marks) (d) Originally, the insurance expense was mistakenly omitted and thus the expenses were greatly understated and the income was much higher than the current number. The error was identified and corrected using an correcting entry by the accountant. However, when the president of Reed Company prefers the original income and requires the accountant to remove the adjusting for insurance (1) Who are the stakeholders in this situation? (2 marks) (it) Which accounting principles might be violated in this situation? Explain the effects on financial statements of the requirement by the president