right answer please

Assignment #2 Total 35 marks BUDDY CORPORATION ADJUSTED TRIAL BALANCE DECEMBER 31, 2019 version 2 ACCOUNTS DEBIT CREDIT 3,450 280,000 0 CASH 6,868 SHORT TERM FV-NI INVESTMENTS 10,300 ACCOUNTS RECEIVABLE 425,905 ALLOWANCE FOR DOUBTFUL ACCOUNTS INVENTORY 422,812 NOTES RECEIVABLE 8,000 OFFICE BUILDING 500,000 ACCUMULATED DEPRECIATION (OFFICE BUILDING) OFFICE EQUIPMENT 120,000 ACCUMULATED DEPRECIATION (OFFICE EQUIPMENT) LAND 52,000 ACCOUNTS PAYABLE DIVIDENDS PAYABLE NOTES PAYABLE, DUE IN 2022 PREFERRED STOCK, 30,000 OUTSTANDING ON DECEMBER 31, 2019 COMMON STOCK, 100,000 number of shares outstanding ON DEC 31, 2019 RETAINED EARNINGS SALES REVENUE SALES DISCOUNTS 10,571 SALES RETURNS AND ALLOWANCES 51,359 PURCHASES 2,600,824 PURCHASES DISCOUNTS TRANSPORTATION - IN 25.235 SHIPPING EXPENSE 15,000 SALARIES EXPENSE 298,757 7,328 60.000 120,000 200,000 269,423 3,471.148 46,778 15,000 271,599 32,580 40,955 16,456 25,673 SHIPPING EXPENSE SALARIES EXPENSE EMPLOYEE PENSION EXPENSE RENT EXPENSE INSURANCE EXPENSE SUPPLIES EXPENSE GAIN ON SALE OF ASSETS OF DISCONTINUED ACTIVITY ADVERTISING EXPENSE WARRANTY EXPENSE OPERATING LOSS ON DISCONTINUED OPERATIONS TELEPHONE EXPENSE CASH DIVIDENDS DECLARED - PREFERRED CASH DIVIDENDS DECLARED - COMMON TOTAL 3,650 18,860 15,000 12,225 28,580 37,568 12,164 4,760,534 4,760,534 NOTE: All revenue, expense figures (Income Statement accounts) and the Error correction (Retained Earnings account) above are before tax. Assume this company is following ASPE ADDITIONAL INFORMATION: 1. Assume that the tax rate was 30%. All accounts on the Trial Balance are before tax. 2. In 2019 common stock was issued as follows: on May 1: 15,000 common shares were issued and on September 1: 35,000 common shares were issued. The amount of common stock outstanding at the end of the year (Dec 31, 2019) is 100.000 3. It was discovered that an error occurred in 2018 relating to Depreciation Expense. The Depreciation Expense was understated in 2018 by $15,200 before taxes. orway 10,000 COTTON Suares were issued and on September 1: 35,000 common shares were issued The amount of common stock outstanding at the end of the year (Dec 31, 2019) is 100,000 3. It was discovered that an error occurred in 2018 relating to Depreciation Expense. The Depreciation Expense was understated in 2018 by $15, 200 before taxes. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed. 4. The company performed a year end physical count of its inventory as at December 31, 2019. The amount of inventory on hand at December 31, 2019 amounted to $425,700 Inventory is maintained on a PERIODIC basis. Therefore the Inventory balance on Trial Balance is the opening balance. NOTE: This entry has not been reflected in the above Trial Balance. An adjustment is needed REQUIRED 1. Prepare a detailed multi-step income statement (including detailed EPS presentation) and a Statement of Retained Earnings for December 31, 2019. (30 marks) Show calculations for EPS. Show details of COST OF GOODS SOLD and OPERATING EXPENSES sections when preparing Income Statement. 2. Prepare the required journal entry to adjust the 2018 Depreciation error. (2 marks) 3. Prepare the COGS year end adjusting entry to update COGS and Inventory