A B D E F G The Okanagan Soap Company has the following opening trial balance at May 1, 2021. As you know The Corporate Accounting team has recorded all of the recurring monthly journal entries. They are now providing the unadjusted trial balance (shown below) to you to record the remaining adjusting journal entries and prepare the month-end financial statements. Unadjusted TB - May 31, 2021 DR CR Cash 52,800 Accounts Receivable 25,670 Prepaid Insurance 4,166 Supplies 1,130 Finished Goods Inventory 3,690 Equipment 18,000 Accumulated Depreciation - Equipment 4,200 Accounts Payable 14,245 Salaries Payable Unearned Revenue 5,333 Income Tax Payable 1,120 Interest Payable 87 Note Payable 15,000 Common Shares 15,500 Retained Earnings 38,170 Dividends 500 Revenue 26,945 Cost of Goods Sold 8,250 Salaries Expense 2,200 Rent Expense 650 Depreciation Expense 300 Insurance Expense 417 Sunnline France 1620 Ratos Formula Sheet Question One OL Part O Part 21 Part 3 Instructions 01 PATA Question Two Question TWO Respon B D E 300 417 38 Depreciation Expense 39 Insurance Expense 40 Supplies Expense 41 Income Tax Expense 42 Interest Expense 1,620 1,120 87 120,600 43 Total 120,600 44 45 Data for adjusting journal entries required at month-end: 46 Please note that you may need to add additional accounts to the trial balance. 48 1. At May 31st, the Accounts Receivable aging schedule is broken down as follows: 47 49 Total Number of Days Outstanding Estimated Balance Estimated Percentage Uncollectible 50 Uncollectibl e Accounts 51 0-30 Days 52 31 -60 Days 53 61 - 90 Days 54 Over 90 Days 55 Total 20,000 2,500 1,775 1,395 25,670 1.0% 2.0% 5.0% 7.5% $ 56 57 REQUIRED: 58 Record the journal entry to record the bad debt expense at May 31st. There is no opening balance in 59 allowance for doubtful accounts: 00 61 2. On May 1st, the Okanagan Soap Company provided an employee with a short-term loan. The note receivable 62 was issued for $6,300, with the agreement that the employee will pay the loan backin 4 months at 7% interest 63 64 REQUIRED: 65 Record the journal entry to record the note recolvable and any adjusting journal entries required at month and Format Question One 0 Pro Q B D G 64 REQUIRED: 65 Record the journal entry to record the note receivable and any adjusting journal entries required at month-end. 66 67 3. On May 31st, the company sold some of their unused computer equipment. The computers originally cost 68 $5,720 when they were purchased in May 2018. They were depreciated on a straight-line basis with a residual 69 value of $1,000 and a useful life of 5 years. The computers were sold for $750 cash. 70 Note: The depreciation expense on these computers was already recorded when the assets were sold. 71 72 REQUIRED: 73 Record the journal entry to record the disposal of the computer equipment and any related gain or loss on sale. 74 75 4. On May 1st, the company completed the registration of a patent on a proprietary product. The patent was purchased 76 for $15,950 on account. The patent has an estimated useful life of 10 years with no residual value 77 78 REQUIRED: 79 Record the journal entry for the purchase of the patent and any related adjustments needed at month-end. 80 81 5. The Corporate Accounting team calls to let you know that they forgot to record sales tax expense this year. Oops! 32 Being located in the province of British Columbia, the Okanagan Soap Company is subject to 12% sales tax (5% GST and 83 7% PST). From January 1st to May 31st, they have incurred $128,960 in revenues. 84 Note: The sales tax expense has not yet been remitted to the federal or provincial governments. 85 86 REQUIRED: 87 Record the journal entry to record the sales tax expense at May 31st 89 6. You notice that the trial balance does not include any journal entries for employee or employer payroll deductions: 90 You contact the Payroll department and their derk admits that they forgot to provide the journal entries to the 91 Corporate Accounting team Oops! No journal entries have been recorded and no remittance payments have been 92 made to the federal or provincial governments so far in 2021 9 94 The Payroll Clerk provides you with the following information Istrutto Rates For Sheet Question One 011 Rat PDIP Gunston Tuotespana 88 A B D E 1 G 875 CPP Deducted from Employees El Deducted from Employees Employee Income Tax Withheld Employer's Portion of CPP o Employer's Portion of El 1,050 3,375 875 1,400 1 2 REQUIRED: 3 Record the journal entries to record the missing payroll expenses, 04 05 7. On May 15th, the company issues 2,500 common shares in exchange for new manufacturing equipment. 06 The fair value of the equipment is determined to be $7,895. 107 208 On May 31st, the company decides to issue a new class of shares to their owners, Karina and Byron Lloyd. 109 Karina and Byron are each issued 3,000 preferred shares (S5 non cumulative) for $3.00 each 110 111 REQUIRED: 112 Record the journal entries for the issue of common and preferred shares. 113 114 8. The Okanagan Soap Company has some excess cash that they would like to earn a better return on 115 During the month of May, the following transactions took place 116 117 On May 1st, the company purchased 150 shares in The Honest Company. The shares were trading for $15.50 118 on the date of purchase. 119 120 On May 15th, they decided to sell 50 shares. The shares were trading for $18.00 on the date of the sale, 1121 122 At May 31st, the shares are worth $16.75 each 123 124 REQUIRED: 125 Record the journal entries for the held for trading invesment that took place throughout the month. A B D F G 114 8. The Okanagan Soap Company has some excess cash that they would like to earn a better return on. 115 During the month of May, the following transactions took place: 116 117 On May 1st, the company purchased 150 shares in The Honest Company. The shares were trading for $15.50 118 on the date of purchase. 119 120 on May 15th, they decided to sell 50 shares. The shares were trading for $18.00 on the date of the sale. 121 122 At May 31st, the shares are worth $16.75 each. 123 124 REQUIRED: 125 Record the journal entries for the held for trading investment that took place throughout the month 127 REQUIRED FOR QUESTION ONE: 126 128 129 1. Prepare the journal entries to record the May transactions as noted above. (28 marks) 130 2. Prepare an adjusted trial balance at May 31st. (10 marks) 131 3. Prepare an income statement, statement of changes in equity and statement of financial 4. Calculate the following ratios at May 31st: (6 marks) a) Current Ratio b) Debt-to-Total Assets c) Gross Profit Margin 132 133 NOTE re. Rounding: Please round all of your calculations to ZERO decimal places, with the exception of the 134 ratio calculations, whch should be rounded to TWO decimal places. 135 136 132 A B D E F G The Okanagan Soap Company has the following opening trial balance at May 1, 2021. As you know The Corporate Accounting team has recorded all of the recurring monthly journal entries. They are now providing the unadjusted trial balance (shown below) to you to record the remaining adjusting journal entries and prepare the month-end financial statements. Unadjusted TB - May 31, 2021 DR CR Cash 52,800 Accounts Receivable 25,670 Prepaid Insurance 4,166 Supplies 1,130 Finished Goods Inventory 3,690 Equipment 18,000 Accumulated Depreciation - Equipment 4,200 Accounts Payable 14,245 Salaries Payable Unearned Revenue 5,333 Income Tax Payable 1,120 Interest Payable 87 Note Payable 15,000 Common Shares 15,500 Retained Earnings 38,170 Dividends 500 Revenue 26,945 Cost of Goods Sold 8,250 Salaries Expense 2,200 Rent Expense 650 Depreciation Expense 300 Insurance Expense 417 Sunnline France 1620 Ratos Formula Sheet Question One OL Part O Part 21 Part 3 Instructions 01 PATA Question Two Question TWO Respon B D E 300 417 38 Depreciation Expense 39 Insurance Expense 40 Supplies Expense 41 Income Tax Expense 42 Interest Expense 1,620 1,120 87 120,600 43 Total 120,600 44 45 Data for adjusting journal entries required at month-end: 46 Please note that you may need to add additional accounts to the trial balance. 48 1. At May 31st, the Accounts Receivable aging schedule is broken down as follows: 47 49 Total Number of Days Outstanding Estimated Balance Estimated Percentage Uncollectible 50 Uncollectibl e Accounts 51 0-30 Days 52 31 -60 Days 53 61 - 90 Days 54 Over 90 Days 55 Total 20,000 2,500 1,775 1,395 25,670 1.0% 2.0% 5.0% 7.5% $ 56 57 REQUIRED: 58 Record the journal entry to record the bad debt expense at May 31st. There is no opening balance in 59 allowance for doubtful accounts: 00 61 2. On May 1st, the Okanagan Soap Company provided an employee with a short-term loan. The note receivable 62 was issued for $6,300, with the agreement that the employee will pay the loan backin 4 months at 7% interest 63 64 REQUIRED: 65 Record the journal entry to record the note recolvable and any adjusting journal entries required at month and Format Question One 0 Pro Q B D G 64 REQUIRED: 65 Record the journal entry to record the note receivable and any adjusting journal entries required at month-end. 66 67 3. On May 31st, the company sold some of their unused computer equipment. The computers originally cost 68 $5,720 when they were purchased in May 2018. They were depreciated on a straight-line basis with a residual 69 value of $1,000 and a useful life of 5 years. The computers were sold for $750 cash. 70 Note: The depreciation expense on these computers was already recorded when the assets were sold. 71 72 REQUIRED: 73 Record the journal entry to record the disposal of the computer equipment and any related gain or loss on sale. 74 75 4. On May 1st, the company completed the registration of a patent on a proprietary product. The patent was purchased 76 for $15,950 on account. The patent has an estimated useful life of 10 years with no residual value 77 78 REQUIRED: 79 Record the journal entry for the purchase of the patent and any related adjustments needed at month-end. 80 81 5. The Corporate Accounting team calls to let you know that they forgot to record sales tax expense this year. Oops! 32 Being located in the province of British Columbia, the Okanagan Soap Company is subject to 12% sales tax (5% GST and 83 7% PST). From January 1st to May 31st, they have incurred $128,960 in revenues. 84 Note: The sales tax expense has not yet been remitted to the federal or provincial governments. 85 86 REQUIRED: 87 Record the journal entry to record the sales tax expense at May 31st 89 6. You notice that the trial balance does not include any journal entries for employee or employer payroll deductions: 90 You contact the Payroll department and their derk admits that they forgot to provide the journal entries to the 91 Corporate Accounting team Oops! No journal entries have been recorded and no remittance payments have been 92 made to the federal or provincial governments so far in 2021 9 94 The Payroll Clerk provides you with the following information Istrutto Rates For Sheet Question One 011 Rat PDIP Gunston Tuotespana 88 A B D E 1 G 875 CPP Deducted from Employees El Deducted from Employees Employee Income Tax Withheld Employer's Portion of CPP o Employer's Portion of El 1,050 3,375 875 1,400 1 2 REQUIRED: 3 Record the journal entries to record the missing payroll expenses, 04 05 7. On May 15th, the company issues 2,500 common shares in exchange for new manufacturing equipment. 06 The fair value of the equipment is determined to be $7,895. 107 208 On May 31st, the company decides to issue a new class of shares to their owners, Karina and Byron Lloyd. 109 Karina and Byron are each issued 3,000 preferred shares (S5 non cumulative) for $3.00 each 110 111 REQUIRED: 112 Record the journal entries for the issue of common and preferred shares. 113 114 8. The Okanagan Soap Company has some excess cash that they would like to earn a better return on 115 During the month of May, the following transactions took place 116 117 On May 1st, the company purchased 150 shares in The Honest Company. The shares were trading for $15.50 118 on the date of purchase. 119 120 On May 15th, they decided to sell 50 shares. The shares were trading for $18.00 on the date of the sale, 1121 122 At May 31st, the shares are worth $16.75 each 123 124 REQUIRED: 125 Record the journal entries for the held for trading invesment that took place throughout the month. A B D F G 114 8. The Okanagan Soap Company has some excess cash that they would like to earn a better return on. 115 During the month of May, the following transactions took place: 116 117 On May 1st, the company purchased 150 shares in The Honest Company. The shares were trading for $15.50 118 on the date of purchase. 119 120 on May 15th, they decided to sell 50 shares. The shares were trading for $18.00 on the date of the sale. 121 122 At May 31st, the shares are worth $16.75 each. 123 124 REQUIRED: 125 Record the journal entries for the held for trading investment that took place throughout the month 127 REQUIRED FOR QUESTION ONE: 126 128 129 1. Prepare the journal entries to record the May transactions as noted above. (28 marks) 130 2. Prepare an adjusted trial balance at May 31st. (10 marks) 131 3. Prepare an income statement, statement of changes in equity and statement of financial 4. Calculate the following ratios at May 31st: (6 marks) a) Current Ratio b) Debt-to-Total Assets c) Gross Profit Margin 132 133 NOTE re. Rounding: Please round all of your calculations to ZERO decimal places, with the exception of the 134 ratio calculations, whch should be rounded to TWO decimal places. 135 136 132