Barley Inc. sells bags of malted barley to breweries in Southern Ontario. The company does not sell any other products and uses the perpetual method along with the first-in first-out method (FIFO) of inventory valuation. At January 1, 2022, the company had the following account balances Accounts receivable (all from Brewery A) Allowance for doubtful accounts Inventory (600 bags of barley) $ 40,000 dr 3,500 cr 30,000 dr During the three months ended March 31, 2022, Barley Inc. had the following transactions: Jan. 8 Jan. 18 Jan 27 Feb 14 Feb 16 Feb 24 Feb 25 Mar 5 Purchased 300 bags of barley for $21,000 cash. Sold 600 bags of barley to Brewery B for $60,000 on account with terms 2/10, net 30. Received full payment from Brewery B. Received payment from Brewery A of $37,500. Wrote of the remaining amount from Brewery A. Purchased 400 bags of barley for $30,000 cash. Sold 400 bags of barley to Brewery C for $40,000 on account with terms 2/10, net 30. Sold 200 bags of barley to Brewery D for $20,000 on accounts with terms 2/10, net 30. Barley Inc. estimates that 5% of any overdue accounts and 1% of any undue accounts will not be collected. Required 1. Provide journal entries to record the above transactions and any necessary quarter end adjusting entries. 2. Prepare a statement of earnings up to gross profit/margin for the three months ended March 31, 2022.