You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the companys accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the companys fiscal year.CASH DR 440,000 Accounts Receivable DR 530,000 Allowance for bad debts CR 40,000 Merchandise Inventory DR 320,000 Store Supplies DR 10,000 Prepaid Rent DR 280,000 Furniture and Equipment DR 600,000 Accumulated depreciation - furniture and equipment CR 120,000 Accounts payable CR 145,000 Wages Payable Notes Payable Long term CR 510,000 Unearned sales revenue CR 260,000 Peter Pantry Capital CR 1,900,000 Peter Pantry Withdrawal DR 75,000 Sales revenue earned CR 1,095,000 Cost of goods sold DR 645,000 Wages expense DR 525,000 Rent expense DR 210,000 Utilities expense DR 230,000 Depreciation expense - furniture and equipment Store supplies expense DR 160,000 Bad debt expense Interest expense DR 45,000 TOTAL DR 4,070,000 CR 4,070,000

The following additional information is available at June 30, 2018:

(i) Eight (8) months rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018

(ii) The Furniture and equipment is being depreciated over 10 years on the double-declining balance method of depreciation, down to a residue of $80,000.

(iii) Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.

(iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand.

(v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded.

(vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000.

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2018. [Narrations are not required] (9 marks)

b) Prepare the companys multiple-step income statement for the year ended June 30, 2018. (12 marks)

c) Prepare the companys statement of owners equity for the year ended June 30, 2018. (3 marks)

d) Prepare the companys classified balance sheet as at June 30, 2018. (16 marks)