It is for test preparation
Marco Polo sells outdoor sporting equipment. You have been working for the company since its inception a few years ago and have been promoted to be their accounting manager. They use the perpetual inventory system and use the weigted average method to determine value for the inventory. The opening balances for the month of September are as follows: Marco Polo Balance Sheet As at September 30, 2020 Assets Liabilities Cash $26,800 Accounts Payable $18,700 Accounts Receivable 18,000 Bank Loan 25,000 Merchandise Inventory 12,750 Total Liabilities $43,700 Equipment 120,000 Shareholders' Equity Accumulated Depreciation -40,000 Common Shares 62,000 Retained Earnings 31,850 Total Assets $137,550 Total Liabilities & Shareholders' Equit $137,550 The inventory figure includes 500 units purchased at $25.5 each. The 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 EXPENSES Equipment 140 Cost of Goods Sold 500 Accumulated Depreciation 145 Employee Benefits Expense 510 LIABILITIES Depreciation Expense 515 Accounts Payable 200 Insurance Expense 520 Interest Payable 05 Interest Expense 525 CPP Payable 220 Office Supplies Expense 530 El Payable 225 Rent Expense 535 Income Tax Payable 230 Salaries Expense 540 Salaries Payable 235 Bank Charges Expense 545 Unearned Revenue 240 Maintenance Expense 550 Bank Loan 245 Entertainment Expense 655 SHAREHOLDERS' EQUITY Common Shares 300 Retained Earnings 305Transactions for the month of October: Bought inventory from Outdoor Muzi on account, invoice #5455; 1000 units at $30 each. Terms of the purchase were 4/10, net 30. Update the inventory table after each purchase. Sold goods to Outback Kian, 700 units at $100 each with invoice #4741. The invoice terms were 5/10, net 30. Update the inventory table after each sale. Paid $1,200 with cheque #143 to Outdoor Muzi for an amount owing from last month. Bought inventory from Climb Foe with cheque #144, 600 units at $25 per unit. Returned 200 defective units to Climb Foe and received cash. Received $900 from Firewood Bill for a sale on account last month. Oct 10 Outback Kian paid invoice #4741 on time and took advantage of the early payment discount. Prepared the payroll for October. Gross pay is $8,400, CPP is 5416, El is $158 and income taxis $1,680. The employer matches CPP contributions and pays 1.4 times the El deduction. Use the general journal to record this. The cheque will be prepared later. _ _ _ Record the transactions above in the general journal
