Question 2 (26 marks) Joyce Corporation engages in the provision of repair services. The Corporation prepare adjusting entries at the end of each month. The unadjusted trial balance for Joyce Corporation as at the end of the financial year, 31 December 2016, is shown as below: Unadjusted Trial Balance Account Titles Dr ($) Cr ($) Cash 150,500 Accounts receivable 115,800 Note receivable (10-month, 9%, due on 31 March 2017) 110,000 Inventory 112,000 Supplies 16,720 Prepaid insurance 18,000 Equipment 123,000 Accumulated depreciation, equipment 54,500 Accounts payable 110,200 Share capital ($1 value per share) 145,000 Retained earnings 217,000 Repair service revenues 241,570 Interest rcvcnuc 4,950 Rent expense 40,000 Advertising expense 57,200 Depreciation expense 3,500 Salaries expense 20,500 Income tax expense 6,000 Total 773,220 773,220 The following events have not yet been incorporated to the above unadjusted trial balance: 1. On 31 December 2016, supplies remaining on hand amounted to $6,500. 2. Prepaid insurance represents a 4-year insurance premium paid on 1 January 2016 and effective on the same date. No insurance expense has yet been recorded in 2016. 3. Note receivable represents a loan lent to its subsidiary company on 1 June 2016. Interest on note receivable will be received from the subsidiary company on 31 March 2017. 4. On 31 December 2016, Joyce Corporation declared cash dividends of $0.5 per share to share capital outstanding on the same date. Payment will be made to shareholders on 26 February 2017. 5. Several employees worked overtime during Christmas holiday, and Joyce Corporation agreed to pay a total overtime of $800 to them. Payment will be made on 9 January 2017. 6. Depreciation expense for the month in respect of the equipment amounted to $5,500. 7. Income tax expense for the whole year 2016 is estimated at $8,500 and the same will be paid in April 2017. Required: (a) Prepare the necessary adjusting/additional entries at 31 December 2016. (14 marks) (b) Taking into account all necessary adjustments, prepare the Income Statement of Joyce Corporation for the year ended 31 December 2016. (12 marks)