. Paragraph Styles Part 1 - Answer the following question 9.100 Question 1 (40 marks) A. The following working paper shows the unadjusted and the adjusted trial balance for Farah Company as of December 31, 2019. Uradjusted Adjusted Trial Balance Trial Bahnce Cash $ 47,640 47,640 Accmed revenue 14.000 22,000 Prepaid insurance (Prepayments) 0 2.000 Office equipment 84,000 84.000 Accum Depreciation Office equip $ 14,000 $ 20,000 Accounts payable 9.100 Interest payable (Accrul) 0 1.000 Sahres payable (Accrals) 0 7.000 Long-term notes payable 52.000 52.000 Farah. Capital 40.000 40.000 Farah Withdrawal 5.000 5.000 Consulting fees eamed (Reveres) 123 240 131.240 Depreciation expense Office equip . 0 6,000 Sabues expense 67,000 74.000 Interest expense 1.200 2.200 Insurance expense 5000 3,000 Rest expense 14.500 14,500 Required: 1 - Prepare the adjusting entries that have been made in Farah Company (Ll Marks) 2. Explain the differences between the adjusting entries and other journal entries. Also, explain why adjusting entries are needed (3 Marks) 3- Prepare Farah's income statement for the year ended December 31, 2019. (2.75 Marks) 4- Prepare Farah's balance sheet as at December 31, 2019 2.75 Marks B. The following information pertains to Nous Company JU RA..A 3,000 Styles Paragraph U 0,000 Deprecation expense Once equip . 67,000 74,000 Salaries expense 1,200 2.200 Interest expense Insurance expense 5000 14,500 14,500 Rent expense Required: 1- Prepare the adjusting entries that have been made in Farah Company. (11 Marks) 2- Explain the differences between the adjusting entries and other journal entries. Also, explain why adjusting entries are needed. (3 Marks) 3. Prepare Farah's income statement for the year ended December 31, 2019, (2.75 Marks) 4. Prepare Farah's balance sheet as at December 31, 2019. (2.75 Marks) B- The following information pertains to Nour Company: 1- Equipment was purchased on July 1, 2018 for $140,000. It is useful life is 5 years and it can be sold after the 5 years for $20,000 2- Building was purchased on January 1, 2018 for $200,000. It is useful life is 20 years and depreciated on a reducing balance rate of 10% 3- Furniture was purchased on April 1, 2017 for $80,000. Its salvage value is $20,000 and depreciated on a straight-line balance rate of 20%. 4.On December 31, 2019 the balance of Receivables was $110,000 and the balance of Allowance of irrecoverable receivables was $14,000. Before adjusting the accounts, Nour finds that receivables of S10,000 need to be written off as irrecoverable, and the allowance for receivables is to be set at ten percent of the remaining outstanding receivables as at 31 December 2019. Required: 1- Prepare the necessary adjusting entries in Nour Company at the end of its fiscal year, Doc 31. 2019. Show your calculations 1124 THE (1) Page 20 Ball 2020/2021