Goulet Inc., set up as a privately held corporation, operating as a ready to wear garments retailer, of which 100% of the Common Shares are owned by Lawrence Goulet. You were hired to account for transactions for the month of August 2023, complete month end processing, prepare the financial statements and perform a financial ratio analysis as of the end of that month. They use perpetual inventory system and use the weigted average method to determine value for the inventory. Its balance sheet as at July 31, 2023, is presented below. Goulet Inc. Classified Balance Sheet As at July 31, 2023 Assets Cash $81,240 Accounts Receivable 30,090 Merchandise Inventory 27,600 Prepaid Insurance 9,200 Total Current Assets 148,130 Long-Term Assets Equipment 175,000 Accumulated Depreciation -92,000 83,000 Total Assets $231,130 Liabilities Current Liabilities Accounts Payable $29,200 Unearned Revenue $17,000 Salaries Payable $9,600 Current Portion of Bank Loan 22,560 Total Current Liabilities $78,360 Non-Current Liabilities Non-Current Portion of Bank Loan 33,840 Total Liabilities $112,200 Shareholders' Equity Common Shares 93,200 Retained Earnings 25,730 Total Shareholders' Equity 118,930 Total Liabilities & Equity $231,130 Notes Relating to Balances: Customers and balances Suppliers and Balances Vachon Inc. $7,120 Design Shirts Co $15,400 Dunn Inc. $9,250 Printed Shirts Corp. $8,300 Picard Inc. $6,620 Gabe Clothing Co. $5,500 Moreau Inc. $4,100 Total $29,200 Duncan Inc. $3,000 Total $30,090 The bank loan has an annual interest rate of 7% and has monthly principal payment of $1,880. Page 1Transactions for the month of August: Aug 1 Paid the amount owing from July 31 for salaries payable amounting to $9,600, Cheque #7107. Aug 1 Paid rent for August amounting to $1050, Cheque #7108 Aug 5 Goulet Inc. decided to establish a petty cash fund for the office. A cheque #7109 of $600 was issued and cashed. Purchased merchandise from Design Shirts Co. on account, invoice #425; 6,100 units at $26 each. Aug 5 Terms of the purchase were net 30, FOB Destination. The seller paid the shipping cost amounting to $522. Note: Update the Inventory Valuation table after each purchase. Sold mechandise on accout to Dunn Inc., 4,250 units at $60 each with invoice #100102. The invoice Aug 7 terms were 3/10, net 30, FOB Destination. Note: Update the Inventory Valuation table after each sale. Aug 12 Paid $15,400 with a cheque #7110 to Design Shirts Co. for the July invoices owing. Aug 14 Dunn Inc. paid invoice #100102 less the discount. The employees are paid bi-weekly. Paid the payroll for the first half of August, cheque #7111. Gross Aug 15 pay is $17,500, CPP is $893, El is $329 and income tax is $3,500. Use the general journal to record this . Aug 15 Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Aug 18 Bought inventory from Gabe Clothing Co. with cheque #7112, 3,600 units at $22 per unit. Note: Update Inventory Valuation table to reflect purchase. Aug 20 Sold 3,000 units on account at $63 each with invoice #100103 to Moreau Inc.. The invoice term 3/10, net 30, FOB shipping point. Note: Update Inventory Valuation table. Aug 20 Received $7,120 from Vachon Inc. for a sale on account last month. The remaining balance of the petty cash account was $245. Total expenses incurred using the petty cash fund this month amounting to $230. In this amount, it includes the shipping cost incurred on Aug 25 August 7 in the amount of $166 and the other costs are for the office supplies expense. Prepare the entry to replenish the petty cash fund with Chq #7113 . Aug 31 Made monthly bank loan payment of $2,209 which includes $1,880 principal and $329 interest. Prepared the payroll for the second half of August to be paid on September 5. Gross pay is $19,000, Aug 31 CPP is $969, El is $357 and income tax is $3,800. The cheque will be prepared later. Use the general journal to record this. Aug 31 Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees.General Journal Date Account Title and Explanation Page 3 PR DR CRThe Chart of Accounts (GL no.) is shown below: Account Description Account # Account Description Account # ASSETS REVENUE Cash 101 Sales Revenue 400 Petty Cash 105 Sales Discounts 405 Accounts Receivable 110 Sales Returns and Allowances 410 Merchandise Inventory 120 Interest Revenue 420 Prepaid Insurance 125 Other Income 430 Equipment 140 EXPENSES Accumulated Depreciation 145 Cost of Goods Sold 500 LIABILITIES Employee Benefits Expense 510 Accounts Payable 200 Depreciation Expense 515 Interest Payable 205 Insurance Expense 520 CPP Payable 220 Interest Expense 525 El Payable 225 Office Supplies Expense 530 Income Tax Payable 230 Rent Expense 535 Salaries Payable 235 Salaries Expense 540 Unearned Revenue 240 Bank Charges Expense 545 Bank Loan 245 Maintenance Expense 550 SHAREHOLDERS' EQUITY Entertainment Expense 555 Common Shares 300 Shipping Expense 560 Retained Earnings 305 Cash Over and Short 565 Required: a) Prepare the journal entries for the month of August. You will also need to update the inventory in the table for each purchase and sale, return or allowance, found under the Inventory Valuation tab of this workbook. b) Post the above journal entries to the general ledger accounts. c) Complete the bank reconciliation report. d) Record the journal entries from the bank reconciliation and post amounts to general ledger accounts. e) Prepare the multistep income statement, calculation of retained earnings, classified balance sheet found under the financial statements tab of this workbook. f) Answer the analysis questions from 'a' to 'I' found under the financial statements tab of this workbook. Page 2\fYour accountant goes through the mail and opens the bank statement for the month of August provided by Bank of Commerce. It is shown below. Bank of Commerce Prepared for Goulet Inc. Date Information Withdrawal Deposit Balance Opening Balance 49,780.00 Aug 1 Paid Chq#7107 9,600.00 40,180.00 Aug 1 Deposit 31,460.00 71,640.00 Aug 5 Paid Chq#7109 600.00 71,040.00 Aug 14 Paid Chq#7110 15,400.00 55,640.00 Aug 14 Deposit 247,350.00 302,990.00 Aug 15 Paid Chq#7111 12,778.00 290,212.00 Aug 18 Paid Chq#7112 79,200.00 211,012.00 Aug 20 Chq#45210 8,470.00 202,542.00 Aug 25 Chq#7113 355.00 202,187.00 Aug 31 Auto debit loan payment 2,209.00 199,978.00 Aug 31 Service Charge 240.00 199,738.00 Interest 125.00 199,863.00 General Ledger Accounts Account: Cash GL No: 101 Date Description PR DR CR Balance (DR or CR) Opening Balance 81,240.00 DR Aug 1 Paid Chq#7107 9,600.00 71,640.00 DR Aug 1 Paid Chq#7108 GJ3 ,050.00 70,590.00 DR Aug 5 Paid Chq#7109 GJ3 600.00 69,990.00 DR Aug 12 Paid Chq#7110 GJ3 15,400.00 54,590.00 DR Aug 14 Received payment GJ3 247,350.00 301,940.00 DR Aug 15 Paid Chq#7111 GJ3 12,778.00 289,162.00 DR Aug 18 Paid inventory Chq#7112 GJ3 79,200.00 209,962.00 DR Aug 25 Petty Cash Chq#7113 GJ3 355.00 216,727.00 DR Aug 30 Received payment GJ3 7,120.00 217,082.00 DR Aug 31 Paid loan GJ3 2,209.00 214,518.00 DR Additional Information: a) The $31,460 is already recorded in the ledger last month. b) Cheque number of the company has (4) digits. Required: Prepare the August bank reconciliation for Goulet Inc. using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record theGoulet Inc. Classified Balance Sheet As at July 31, 2023 Assets Cash $81,240 Accounts Receivable $30,090 Merchandise Inventory $27,600 Prepaid Insurance $9,200 Total Current Assets 148,130 Long-Term Assets Equipment 175,000 Accumulated Depreciation 92,000 83,000 Total Assets $231,130 Liabilities Current Liabilities Accounts Payable $29,200 Unearned Revenue $17,000 Salaries Payable $9,600 Current Portion of Bank Loan $22,560 Total Current Liabilities $78,360 Non-Current Liabilities Non-Current Portion of Bank Loan 33,840 Total Liabilities $112,200 Shareholders' Equity Common Shares 93,200 Retained Earnings 25,730 Total Shareholders' Equity 118,930 Total Liabilities & Equity $231,130 Required: Using the balances of the General Ledger accounts as of August 31, complete the financial statements.Your accountant goes through the mail and opens the bank statement for the month of August provided by Bank of Commerce. It is shown below. Bank of Commerce Prepared for Goulet Inc. Date Information Withdrawal Deposit Balance Opening Balance 49,780.00 Aug 1 Paid Chq#7107 9,600.00 40,180.00 Aug 1 Deposit 31,460.00 71,640.00 Aug 5 Paid Chq#7109 600.00 71,040.00 Aug 14 Paid Chq#7110 15,400.00 55,640.00 Aug 14 Deposit 247,350.00 302,990.00 Aug 15 Paid Chq#7111 12,778.00 290,212.00 Aug 18 Paid Chq#7112 79,200.00 211,012.00 Aug 20 Chq#45210 8,470.00 202,542.00 Aug 25 Chq#7113 355.00 202,187.00 Aug 31 Auto debit loan payment 2,209.00 199,978.00 Aug 31 Service Charge 240.00 199,738.00 Interest 125.00 199,863.00 General Ledger Accounts Account: Cash GL No: 101 Date Description PR DR CR Balance (DR or CR) Opening Balance 81,240.00 DR Aug 1 Paid Chq#7107 9,600.00 71,640.00 DR Aug 1 Paid Chq#7108 GJ3 ,050.00 70,590.00 DR Aug 5 Paid Chq#7109 GJ3 600.00 69,990.00 DR Aug 12 Paid Chq#7110 GJ3 15,400.00 54,590.00 DR Aug 14 Received payment GJ3 247,350.00 301,940.00 DR Aug 15 Paid Chq#7111 GJ3 12,778.00 289,162.00 DR Aug 18 Paid inventory Chq#7112 GJ3 79,200.00 209,962.00 DR Aug 25 Petty Cash Chq#7113 GJ3 355.00 216,727.00 DR Aug 30 Received payment GJ3 7,120.00 217,082.00 DR Aug 31 Paid loan GJ3 2,209.00 214,518.00 DR Additional Information: a) The $31,460 is already recorded in the ledger last month. b) Cheque number of the company has (4) digits. Required: Prepare the August bank reconciliation for Goulet Inc. using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record therelevant journal entries in the general journal and post the entries in the general ledger to bring the company's record up to date. Goulet Inc. Bank Reconciliation Statement August 31, 2023 Explanation Balance per Balance per books BankGoulet Inc. Classified Balance Sheet As at July 31, 2023 Assets Cash $81,240 Accounts Receivable $30,090 Merchandise Inventory $27,600 Prepaid Insurance $9,200 Total Current Assets 148,130 Long-Term Assets Equipment 175,000 Accumulated Depreciation 92,000 83,000 Total Assets $231,130 Liabilities Current Liabilities Accounts Payable $29,200 Unearned Revenue $17,000 Salaries Payable $9,600 Current Portion of Bank Loan $22,560 Total Current Liabilities $78,360 Non-Current Liabilities Non-Current Portion of Bank Loan 33,840 Total Liabilities $112,200 Shareholders' Equity Common Shares 93,200 Retained Earnings 25,730 Total Shareholders' Equity 118,930 Total Liabilities & Equity $231,130 Required: Using the balances of the General Ledger accounts as of August 31, complete the financial statements.1) Prepare a multistep income statement. Goulet Inc. Income Statement For the Month Ended August 31, 2023 2) Prepare a calculation of retained earnings Calculation of Retained Earnings For the Month Ended August 31, 2023Notes: Round unit cost to 2 decimal places, then apply to quanity sold when determining total cost of goods sold. Use this chart to keep track of inventory values The inventory figure includes 1,200 units purchased at $23.00 each. Date Purchases Sales Balance Quantity Unit Cost Value Quantity Unit Cost Value Quantity Unit Cost Value 1,200 23.00 27,600.00relevant journal entries in the general journal and post the entries in the general ledger to bring the company's record up to date. Goulet Inc. Bank Reconciliation Statement August 31, 2023 Explanation Balance per Balance per books BankBased on the information above, answer the following questions. a) Calculate the current ratio as at August 31, 2023. b) Does Goulet Inc. have a good or bad current ratio? Explain why or why not. c) Calculate the inventory days on hand ratio as at August 31, 2023. (Since this is for the month, do not multiply by 365 in the formula. Instead multiply by 31 days.) d) Last month, the inventory days on hand ratio was 7 days. Has the ratio improved? Why or why not? e) Calculate the debt to equity ratio as at August 31, 2023. f) Calculate the gross profit margin as at August 31, 2023. g) Last month, the gross profit margin percentage was 63%. What could have caused this decrease in gross margin percentage?h) Calculate the inventory turnover as at August 31, 2023. i) If inventory turnover last month was 4.43 is the company holding on to inventory for a longer or shorter period of time?3) Prepare a classified balance sheet. Assume that $22,560 of the bank loan will be paid off in the 12 months. Goulet Inc. Balance Sheet As at August 31, 2023