The trial balance of Hillside Gift Shop at December 31, 2021, before adjustments, is as follows: Debit Unearned Sales Revenue...... Credit $78,400 Cash......... $131,850 Inventory, January 1, 2021.. 19,000 Smile Li, Capital 112,000 Smile Li, Drawings... 20,000 Accounts Receivable.. 37,800 Equipment 90,000 Accounts Payable... 2,150 Insurance Expense.... 27,500 Accumulated Depreciation - Equipment.. 18,000 Supplies....... 13,500 Purchases.... 257,650 Prepaid Insurance.. 1,800 Sales Revenue... 510,550 Wages Expense.. 85,000 Rent Expense... 37,000 $721,100 $721,100 The following information relates to year-end adjustments: (1) Inventory at December 31, 2021 had a cost of $20,100. (2) Records show that $8,000 of cash receipts originally recorded as unearned sales revenue had been earned as of December 31, 2021. (3) The company purchased a 12-month insurance policy on October 1, 2021 for $1,800. (4) Supplies on hand at December 31, 2021 amounted to $480. (5) Accrued wages at December 31, 2021 amounted to $2,000. (6) The useful life of equipment was estimated to be 5 years with no residual value. The double-declining balance method is used. (7) Accrued but unrecorded sales revenue as of December 31, 2021 amounted to $1,450. Required: (a) Prepare journal entries to record the adjustments for items (2) to (7). No journal narrations are required. (12 marks) (b) Prepare the income statement for the year ended December 31, (14 marks) 2021