Cash $4,000,000$

Accounts receivable $4,500,000$

Allowance for bad debt $350,000$

Other debtors

Merchandise Inventory $6,000,000$

Store supplies $1,000,000$

Prepaid Insurance $5,015,000$

Prepaid rent $1,960,000$

Furniture and equipment $8,000,000$

Accumulated depreciation$-$ Furniture and equipment

$3,160,000$

Motor truck $2,000,000$

Accumulated depreciation$-$ Motor truck $1,475,712$

Accounts Payable $450,000$

Salary Payable

Interest Payable

Unearned sales revenue $600,000$

Note Payable, long term $2,800,000$

Capital $18,000,000$

Withdrawals $56,570$

Sales revenue $25,954,858$

Sales discount $354,000$

Sales return and allowance $245,000$

Cost of goods sold $9,500,000$

Salaries expense $7,500,000$

Insurance expense

Utilities expense $700,000$

Rent expense $1,960,000$

Depreciation expense$-$ Furniture and Equipment

Depreciation expense$-$ Motor truck

Store Supplies Expense

Gain$/$loss on disposal of fixed Asset

Bad$-$debt Expense

Interest Expense

$52,790,57052,790,570$

Sapphire Gems and Minerals Co Ltd $$ Opal Division

Trial Balance as of December $31,2022$

The following additional information is available December $31,2022$:

$1)$ Store Supplies on hand on December $31,2022,$ amounted to $$700,000.$

$2)$ Insurance of $$5,015,000$ was paid on January $1,2022,$ for the $17-$months to May $31,2023$

$3)$ Prepaid rent expired December $31,2022,$ amounted to $$1,400,000.$

$4)$ The furniture and equipment have an estimated useful life of $10$ years and is being depreciated on the straight$-$line method down to a residual value of $$100,000.$

$5)$ The motor truck cost relates to two Livi Trucks purchased for $$1,000,000$ each by the company on January $1,2016.$ The double$-$declining balance method of depreciation is used to compute the truck$$s depreciation charges and their expected useful life is $10$ years or $100,000$ miles. In $2016,15,000$ miles were driven, $18,500$ in $2017,15,600$ in $2018,17,000$ in $2019,14,500$ in $2020,10,800$ in $2021$ and $12,800$ in $2022.$ The residual value on both truck is $$209,715$ each. On September $1,2022,$ the company sold one of the trucks to Daley Company for $$400,000$ on credit. Round off answers to the nearest dollar.

$6)$ Salaries earned by employees and not yet paid amounted to $$100,000$ on Dec $31,2022.$

$7)$ Accrued interest expense as of December $31,2022,$ $$40,000.$

$8)$ On Dec $31,2022,$ $$500,000$ of the previously unearned sales revenue had been earned.

$9)$ The aging of the Accounts Receivable schedule on Dec $31,2022,$ indicated that the Allowance for Bad Debts should be $$400,000.$

$10)$ A physical count of inventory was done on December $31,2022,$ after making all the other adjustments and this revealed that there was $$5,400,000$ worth of inventory on hand at this point.

Other data:

$11)$ The business is expected to make principal payments totalling $$245,000$ towards the loan during the fiscal year to November $30,2023$

Required:

a$)$ Prepare the necessary adjusting journal entries on Dec $31,2022.[$Narrations are not required$]$

b$)$ Prepare the Adjusted Trial balance for the period ending December $31,2022.$

c$)$ Prepare the following financial statements for the division:

$$ A Multiple$-$step income statement & a Statement of owner$$s equity for the year ended December $31,2022$

$$ A Classified balance sheet, in report format, at December $31,2022.$