Total Marks: 100 marks Question 1 (50 marks) Relax Hotel Company is engaged in providing hotel accommodation, venues for dining and functions and other hotel services. Adjusting entries are performed on a monthly basis. Closing entries are performed annually on December 31. All kinds of income of the Company are recorded in revenue eamed account. Below is the Company's unadjusted trial balance at the year ended 31 December 2019. Relax Hotel Company Unadjusted Trial Balance 31 December 2019 Account Title Cash Accounts receivable Prepaid insurance Hotel supplies Hotel equipment Accumulated depreciation: Hotel equipment Land Accounts payable 4% Notes payable Unearned revenue Interest payable Income taxes payable Dividends payable Share capital ($2 per share) Retained earnings Dividends Revenue earned Salaries expense Insurance expense Rent expense Depreciation expense : Hotel equipment Hotel supplies expense Interest expense Income taxes expense Debit $ Credits 181,500 420,700 13,500 7,500 378,000 157.500 500,000 78,000 120,000 250,000 2.000 61,500 20.000 450,000 204,500 20,000 1,336,300 629,000 63,000 350,000 49,500 3.600 2,000 61.500 $2,679,800 $2.679,800 Information on adjusting entries: (1) A guest has occupied a deluxe double room with sea view from 25 to 31 December 2019 and no entries have been made. The total room charges of $56,000 are settled on 1 January 2020. (2) Hotel equipment is depreciated by straight-line method over an estimated useful life of 7 years. (3) The Company borrowed $120,000 by signing a 9-month notes payable with annual interest rate of 4% on 1 May 2019. The principal and the total accrued interest will be due on 31 January 2020. The last adjusting entries was made on 30 September 2019. (4) The Company purchased medical insurance policy for the employees on 1 February 2019. The insurance premium is paid in advance for three months on i February, 1 May, 1 August and 1 November. (5) On 31 December 2019, the Company signed a contract of $100,000 with a YouTuber to promote the hotel offer in the YouTube channel in January 2020. The payment will be due on 31 January 2020. (6) The accountant estimates that the total income tax expense for the entire year should be $93,600. The amount will be due in mid of April 2020. (7) The unrecorded salaries for employees for December 2019 amounting to S 55,500 will be paid on 7 January 2020 (8) Unearned revenue showed in the account was related to the cash received in advance from a customer for holding a wedding party in the function room of Relax Hotel. The party was held on 25 December 2019. (9) The Company declared a final dividend of $0.2 per share on 24 December 2019, and then paid all the dividends declared on 31 December 2019. No entries for these transactions have been recorded. Required: (a) Prepare the necessary adjusting journal entries on 31 December 2019 to bring the financial records of Relax Hotel Company up-to-date. Use the account titles given in the Trial Balance where appropriate. Show your workings. Explanations are NOT required. If no adjusting entries are required, state "No entry" and name the accounting principle applied. (20 marks) ( Prepare the income statement for the year ended 31 December 2019, showing breakdown of items under the captions of Revenues, Expenses, Profit before Tax, Profit after Tax. (11 marks) (b)