Happy Farm Limited started operation on 1 December 2019. The accountant prepared the following Adjusted Trial Balance at 31 December 2019. However, the accountant had not adjusted for the depreciation and income tax. Credit Happy Farm Limited Adjusted Trial Balance 31 December 2019 Debit Cash $40,000 Inventory $24,000 Accounts receivable $9,900 Prepaid rent $8,000 Unexpired insurance $9,600 Office supplies $600 Rental equipment $240,000 Notes payable Accounts payable Uneamed rental fees Dividends payable Interest payable Share capital - ordinary Share premium - ordinary Dividends $2,000 Sales Cost of goods sold $21,000 Salaries expense $9,300 Maintenance expense $600 Utilities expense $700 Interest expense $500 Office supplies expense $400 $366,600 $100,000 $700 $3.200 $2,000 $500 $40,000 $160,000 $60.200 $366,600 Required a) Suppose Happy Farm Limited purchased all rental equipment by cash on the first day of business, with estimated useful life of 8 years and residual value of $3,000. It uses double declining balance method with partial year depreciation rounded to the nearest full month. Prepare the adjusting entry of depreciation as at 31 December 2019. (3 marks) b) Prepare the income statement and statement of retained camings for the year ended 31 December 2019. Assume an income tax rate of 40%. (9 marks) Prepare the statement of financial position as at 31 December 2019. (12 marks) (Detailed information about the ordinary shares like authorized, issued and outstanding is not required in this part.)