Debussy Company has prepared a set of financial statements:  balance sheet, income statement and statement of retained earnings (see Exhibit 1). The accounting period X1 ends on 30 September X1. Due to the illness of the company€™s accountant, none of the end-of-period entries have been recorded.

Required
1 Show the impact on the financial statements of the end-of-period transactions or events which are described in Exhibit 2
2 Update the financial statements in Exhibit 1 taking into account these transactions and events. Exhibit 1 Preliminary financial statements (000 CU)

Exhibit 2 End-of-period entries (all amounts in 000 CU)
1 Depreciation expense on the building is 80 CU for X1.
2 Part of the building owned by the company has been rented to other companies with occupancy starting on 1 September X1 The amount invoiced to the tenants (60 CU in total) was paid in advance for three months and collected in cash. It has been recorded in the item €˜Unearned rent revenue€™ at the time the payment was received.
3 Salaries are paid on a weekly basis. The amount corresponding to the last week of September (25 CU) will be paid at the beginning of October.
4 Interest on the note receivable has accrued for one month. It will be collected when the note is due at the end of December. The rate is 6 percent per annum.
5 Income tax at the rate of 30 percent applies to X1. The tax owed will be paid in the following accounting period.
6 An exceptional shareholders meeting held in September X1 decided on a cash dividends distribution of 800 CU (out of the retained earnings). The dividend will be paid out in October X1.

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Income statement For the year ended 30 September X1 Sabs Cost of goods sold Gross profit Operating Expenses 10,000 -6,200 3,800 Salaries Advertisng Insurance Telephone Maintenanca Rent Mscellaneous expense -1,300 -800 -30 -40 Total operating expenses Operating income Deduct interest expense Income before income taxes -25 -21 -2,236 1,564 -25 1,538 Balance sheet-30 September X1 Assets Liabilities and shareholders' equity Current assets Curent Nabwtes Cash Accounts recevable Note receivable Merchandse Inventory Unexpired insurance 1,000 Accounts payable 1,178 Note payable 600 300 400 Uneamed rent revenue 2,000 Total current liabilities 960 20 4,538 Total current assets Long-term assets Sharehoders equity 1,700 Paid-in capital 3,000Retained eamings -300 8,908 Total lablities and Shareholders' equty Land Bulding 5,000 3,038 Accumulated depreciation Total assets 8,998 Statement ofretained eanings Retained earnings, 1 October XO Net income for X1 Total Cash dividends declared Retained earnings, 30 September X1 1,500 1,538 3,038 0 3,038