A small retailer operated by a number of shareholders from a First Nations community. It reports under IFRS at the request of the creditor holding the note payable. The companys post-closing trial balance at December 31, 2020, the end of its fiscal year, is presented below:

Post-Closing Trial Balance December 31, 2020
	Debit	Credit
Cash	$5,000
Accounts receivable	120,000
Allowance for doubtful accounts		$8,000
Inventory	60,000
Estimated inventory returns	1,000
Prepaid insurance	12,000
Equipment	180,000
Accumulated depreciation		80,000
Accounts payable		68,000
Employee income tax payable		6,800
CPP payable		3,200
EI payable		1,200
Refund liability		3,000
Dividends payable		5,000
Notes payable (due 2023)		120,000
Common shares		50,000
Retained earnings		32,800
	$378,000	$378,000

The company had the following transactions during January 2021. When recording these transactions, use the item number listed instead of the date. The company records adjusting entries on a monthly basis.

1. Paid off accounts payable of $55,000.
2. Purchased inventory costing $27,000 on credit.
3. Sold inventory that cost $30,000 on credit for $102,000. However, $2,000 of the amount sold is expected to be refunded due to returns and the cost of the inventory expected to be returned is $800.
4. Collected accounts receivable amounting to $109,000.
5. Wrote off $5,000 of uncollectible accounts receivable.
6. Received inventory returns from customers and reduced accounts receivable from these customers for $2,800. The inventory that these customers returned was in excellent condition and had a cost of $900.
7. Paid all salary-related liabilities outstanding at the beginning of January.
8. Paid salaries to employees, who earned a total of $40,000 of gross pay less employee income tax, CPP, and EI of $7,200, $2,040, and $648, respectively. Withholdings will be remitted in February.
9. Recorded employee benefits expense relating to the employers share of CPP of $2,040 and EI of $907.
10. Paid rent of $9,000.
11. Paid dividends owing on payment date at the beginning of the month.
12. Expired $1,000 of prepaid insurance.
13. Paid monthly interest on the 4%, $120,000 note payable.
14. Sold equipment at the end of January for $14,000 cash. The equipment had a cost of $20,000 and a carrying amount of $12,000.
15. Purchased new equipment at the end of the month costing $10,000 by issuing common shares.
16. Incurred depreciation on equipment on a straight-line basis. The equipment has a useful life of six years and no residual value.
17. Estimated at the end of January that $4,200 of accounts receivable was uncollectible.
18. Estimated that income tax incurred in January amounted to $4,000. This amount will be paid next month.

Instructions

1. Prepare T accounts and enter the December 31 balances.
2. Record the journal entries for the events listed above.
3. Post the journal entries from part (b) to the T accounts.
4. Prepare an adjusted trial balance at January 31, 2021.
5. Prepare a (1) statement of income and (2) statement of changes in equity for the month ended January 31, 2021, (3) statement of financial position at January 31, 2021, and (4) statement of cash flows for the month ended January 31, 2021, using the indirect method.
6. Determine if any note disclosure is needed to accompany the statement of cash flows.