Assignment 1: Preparing and Analyzing Financial StatementsCarefully read and complete the following questions. In addition to the marks indicated, youwill also be graded on format and presentation (5 marks), grammar and spelling (5 marks).This assignment is worth a total of 75 marks and is 10% of your overall grade.A. Preparing Financial Statements (Total marks: 35)1. The following amounts summarize the financial position of The Adams Company on July1, 2020:Assets = Liabilities + Stockholder's EquityCash Accounts + Supplies + Equip. - Acc.+ Prepaid = Acc. Pay. + Notes Pay. + Unearned. + Common + RetainedReceivable Dep. Exp. Revenue SharesEarnings$1,300 1,000 12,000 4,000 400 8,000 4,000 4,000 1,900During July 2020, the business completed these transactions:a. Performed services for a client, and received cash of $7,600.b. Paid $4,000 on accounts payable.c. Received cash of $5,000 and issued common shares.d. Purchased supplies on account, $1,500. As at July 31, 2020, $500 worth of supplies wasused.e. Collected cash from a customer on account, $1,000.f. Consulted on the design of a business report, and billed the client for services rendered,$2,500.g. Recorded the following business expenses: paid office rent 3 months in advance (rent is$300/month), $900; paid advertising, $300.h. Declared and paid a cash dividend of $2,000.i. Received payment in advance from JAK Company of $1,800 for rental of office space, forthe months of July, August and September.j. Bought a three-year business insurance policy of $3,600 and pays cash for it.k. Recorded depreciation on Office Equipment of $400 per month.Requirements:1. Apply the basic accounting equation to complete transaction analysis for eachtransaction. (Hint: enter the balances provided first).2. Prepare adjusting entries at year-end for the company, if necessary. The company'syear-end is July 31, 2020.3. Prepare trial balance for The Adams Company.4. Prepare the Income Statement of The Adams Company for the year ended July 31, 2020.List expenses in decreasing order by amount.5. Prepare the entity's Statement of Retained Earnings for the year ended July 31, 2020.6. Prepare the Balance Sheet of The Adams Company as at July 31, 2020.B. Analyzing Financial Statements (Total marks: 30)Net Sales, net income, and total assets for Anbel Shipping Co. for a five-year period are as follows:(In thousands) 2020 2019 2018 2017 2016Net SalesNet IncomeTotal Assets$700 $618 $325 $309 $29941 39 41 34 27300 262 253 223 201

Requirements:1. Compute trend percentages for each item for 2017 through 2020. Using 2016 as the baseyear and round to the nearest percent.2. Compute the return on net sales for 2018 through 2020 rounding to three decimal places.Explain what this means.3. Compute asset turnover for 2018 through 2020. Explain what this means.4. Compute the return on average total assets (ROA) for 2018 through 2020.5. How does Anbel Shipping's return on net sales compare with previous years? How does itcompare with that of the industry? In the shipping industry, rates above 5% areconsidered good, and rates above 7% are outstanding.6. Evaluate 's ROA for 2020, compared with previous years, and against a 15% benchmarkfor the industry