Case: SquareFit - Student SquareFit owned by Chandler Bing, is an freestyle clothing retailer. You were hired to account the transactions and report the status of the business. They use the perpetual inventory system and use the weigted average method to determine value for the inventory. Its balance sheet as at January 31, 2021, is presented below. SquareFit Classified Balance Sheet As at January 31, 2021 Assets Cash $35,600 Accounts Receivable 18,190 Merchandise Inventory 46,720 Prepaid Insurance 4,400 Total Current Assets Long-Term Assets Equipment 162,000 Accumulated Depreciation -52.000 Total Assets 104,910 110.000 $214,910 Liabilities Current Liabilities Accounts Payable Unearned Revenue Salaries Payable Current Portion of Bank Loan Total Current Liabilities Non-Current Liabilities Non-Current Portion of Bank Loan Total Liabilities $14,800 $8,800 $5,700 11.160 $40,460 23.840 $54,300 Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities & Equity 81,000 69.610 150,610 $214,910 The bank loan has an annual interest rate of 9% and has monthly principal payment of $930. The inventory figure includes 1,460 units purchased at $32.00 each. Account # 400 405 410 420 430 500 510 The Chart of Accounts (GL no.) is shown below: Account Description Account # ASSETS Cash 101 Petty Cash 105 Accounts Receivable 110 Merchandise Inventory 120 Prepaid Insurance 125 Equipment 140 Accumulated Depreciation 145 LIABILITIES Accounts Payable 200 Interest Payable 205 CPP Payable 220 El Payable 225 Income Tax Payable 230 Salaries Payable 235 Unearned Revenue 240 Bank Loan 245 SHAREHOLDERS' EQUITY Common Shares 300 Retained Earnings 305 Account Description REVENUE Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenue Other Income EXPENSES Cost of Goods Sold Employee Benefits Expense Depreciation Expense Insurance Expense Interest Expense Office Supplies Expense Rent Expense Salaries Expense Bank Charges Expense Maintenance Expense Entertainment Expense Shipping Expense Cash Over and Short 515 520 525 530 535 540 545 550 555 560 565 Feb 1 Feb 5 Transactions for the month of February Feb 1 Paid rent for February amounting to $660, Cheque 13354 Squarefit decided to establish a petty cash fund for the office A cheque #3355 of $600 was issued and cashed. Purchased merchandise from Arrow on account, invoice 2425; 1100 units at $28 each Terms of the purchase were 4/10, net 30, FOR Destination. The seller paid the shipping cost amounting to $55. update the inventory table after each purchase. sold mechandise to Prada, 800 units at $75 each with invoice #2341. The invoice terms were 3/10, Feb 7 net 30, FOB Destination Some of goods purchased from Arrow was defective. Arrow agreed to a 5% allowance on the total purchased Note: You will need to adjust the Inventory Valuation to reflect the above allowance Paid total liability with a cheque #3356 to Arrow for the February 5 purchased The employees are paid bi-weekly. Paid the payroll for the first half of February. Gross pay is $12,500, CPP IS $638, El is $235 and income tax is $2,500. Use the general journal to record this. Use cheque #3357 Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Feb 9 Feb 12 Feb 15 Feb 15 Feb 17 Feb 18 Feb 20 Feb 20 Prada paid invoice #2341 on time and took advantage of the early payment discount Note: You will need to adjust the inventory Valuation to reflect the discount Bought inventory from MaxMara with cheque #3358, 1400 units at $30 per unit Sold 600 units at $90 each with invoice #2342 to ZARA. The invoice term 3/10, net 30, FOB shipping point Received $2.230 from Gucci for a sale on account last month. The remaining balance of the petty cash account was $266. Total expenses incurred using the petty cash fund this month amounting to $261. In this amount, it includes the shipping cost incurred on Feb 7 in the amount of $55 and the other costs are for the office supplies expense. Prepare the entry to replenish the petty cash fund with Chq#3359 Made monthly bank loan payment of $1,193 which includes $930 principal and $263 interest. Note: You need to debit the non-current portion of the bank loan for the principal payment. The current portion due will remain the same as the due date for the loan is greater than 12 months from balance sheet dute. Feb 25 Feb 28 At the end of February, the following adjustment had to be journalized to properly report the balances of the company's accounts: Feb 28 Prepared the payroll for the second half of February to be paid on March S. Gross pay is $13,900, CPP is $709, El is $261 and income tax is $2,780. The cheque will be prepared later. Use the general journal to record this Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Balance of Prepaid Insurance represents 11 months left on the policy. Record the adjustment of Feb 28 Ich 10 CULO $400 to the current month expense. Feb 28 of the beginning balance of unearned revenue, $2,640 still remains unearned. Feb 28 Monthly depreciation on the equipment was $2,000. Required: a) Prepare the journal entries for the month of February b) Enter the opening balances of the accounts from the opening balance sheet and post the above journal entries to the account. c) Complete the bank reconciliation report. d) Post journal entries from the bank reconciliation to general ledger accounts e) Complete the 10-column worksheet. e) Post the adjusting entries to the accounts f) Journalize and post the adjustments g) Prepare the multistep income statement, calculation of retained earnings, classified balance sheet h)Answer the analysis questions from 'a' to 'i