Instructions: a) Prepare the journal entries for the following transactions for the month of February. 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 at this warkhaak Feb 1 Paid rent for February amounting to $660, Cheque 13354 Feb 1 Tees R Us decided to establish a petty cash fund for the office. A cheque #3355 of $500 was issued and cashed Purchased merchandise from Henley on account, invoice #1425; 1100 units at $28 each. Terms of Feb 5 the purchase were 4/10, net 30, FOB Destination. The seller paid the shipping cost amounting to $55. Note: Update the Inventory Valuation table after each purchase. Feb 7 Sold mechandise on accout to Arrow, 80D units at $75 each with invoice #2341. The invoice terms were 3/10, net 30, FOB Destination. Note: Update the Inventory Valuation table after each sale. Some of goods purchased from Henley were defective. Henley agreed to a 5%% allowance on the total purchased. Feb 9 Note: You will need to update the Inventory Valuation table to reflect the allowance as it reduces the value of the inventory. Paid total liability with a cheque #3356 to Henley for the February 5 purchase less the allowance from Feb. 9. Feb 12 Note: You will need to update the Merchandise Inventory account to reflect any discount for early payment to supplier. The employees are paid bi-weekly. Paid the payroll for the first hall of February, cheque 116357. Feb 15 Gross pay is $12,500, CIPP is $638, El is $235 and income tax is $2,500. Use the general journal to record this. Feb 15 Record the employer's share of CPP (100%) and El (140%%) of what was deducted from employees. Feb 17 Arrow paid invoice #2341 on time and took advantage of the early payment discount. Bought inventory from Fabrica with cheque #3358, 1400 units at $30 per unit. Note: Update Feb 18 Inventory Valuation table to reflect purchase Feb 20 Sold 600 units on account at $90 each with invoice #2342 to Martin. The invoice term 3/10, net 30, FOB shipping point. Note: Update Inventory Valuation table. Feb 20 Received $3,200 from Columbia for a sale on account last month. The remaining balance of the petty cash account was $150. Total expenses incurred using the Feb 25 petty cash fund this month amounting to $345. 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 Chell3359. Made monthly bank loan payment of $1,076 which includes $930 principal and $146 interest. Feb 28 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 date
