Lacorte 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 Ralph Lacorte. You were hired to account for transactions for the month of April 2022, 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 cost method to determine value for the inventory. Its balance sheet as at March 31, 2022, is presented below. Lacorte Inc. Classified Balance Sheet As at March 31, 2022 Assets Cash $58,100 Accounts Receivable 16,870 Merchandise Inventory 30,240 Prepaid Insurance 6,200 Total Current Assets 111,410 Long-Term Assets Equipment 158,000 Accumulated Depreciation -60,000 98,000 Total Assets $209,410 Liabilities Current Liabilities Accounts Payable $12,000 Unearned Revenue $12,500 Salaries Payable $6,100 Current Portion of Bank Loan 17.280 Total Current Liabilities $47,880 Non-Current Liabilities Non-Current Portion of Bank Loan 25,920 Total Liabilities Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities & Equity Notes Relating to Balances: Customers and balances Tesco Inc. Hollister Inc. Calvin Due Inc. George Inc. Dockers Inc. Total $73,800 76,000 59,610 135,610 $209,410 Suppliers and Balances $3,200 DKNY Co. $12,000 $6,400 GAP CO $0 $4,250 XYC Co. $0 $2,100 Total $12,000 $920 $16,870 The bank loan has an annual interest rate of 7% and has monthly principal payment of $1,440. 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 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 April. You will also need to update the inventory in the table for each purchase and sale found under the Inventory Valuation tab of this workbook. b) Post the above journal entries to the accounts. c) Complete the bank reconciliation report. d) Record the journal entries from the bank reconciliation and post amounts 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 found under the financial statements tab of this workbook. h)Answer the analysis questions from 'a' to 'i' found under the financial statements tab of this workbook. Transactions for the month of April: Apr 1 Apr 1 Apr 5 Apr 5 Apr 7 Apr 12 Apr 14 Apr 15 Apr 15 Apr 18 Apr 201 Apr 20 Apr 251 Apr 30 Apr 30 Apr 30 Paid the amount owing from Mar. 31 for Salaries Payable using Cheque #4500, $6,100. Paid rent for April amounting to $520, Cheque #4501 Lacorte Inc. decided to establish a petty cash fund for the office. A cheque #4502 of 5600 was issued and cashed, Purchased merchandise from DKNY Co. on account, invoice #425; 1,200 units at $42 each. Terms of the purchase were net 30, FOB Destination. The seller paid the shipping cost amounting to $320. Note: Update the Inventory Valuation table after each purchase. Sold mechandise on account to Hollister Inc., 1,220 units at $82 each with invoice #1102. The invoice terms were 3/10, net 30, FOB Destination. Note: Update the Inventory Valuation table after each sale. Paid $12,000. with cheque #4503 to DKNY Co. for the March invoices owing Hollister Inc. paid Invoice #1102 less the discount. The employees are paid bi-weekly. Paid the payroll for the first half of April, cheque #4504. Gross pay is $15,000, CPP is $765, El is $282 and income tax is $3,000. Use the general journal to record this Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Bought inventory from XYC Co. with cheque M4505, 1600 units at $45 per unit. Note: Update Inventory Valuation table to reflect purchase Sold 700 units on account at $84 each with invoice #1103 to George Inc.. The invoice term 3/10, net 30, FOB shipping point. Note: Update Inventory Valuation table.. Received $3,200 from Tesco Inc. for a sale on account last month. The remaining balance of the petty cash account was $200. Total expenses incurred using the petty cash fund this month amounting to $392. In this amount, it includes the shipping cost incurred on April 7 in the amount of $90 and the other costs are for the office supplies expense. Prepare the entry to replenish the petty cash fund with Chq#4506. Made monthly bank loan payment of $1,692 which includes $1,440 principal and $252 Interest. Prepared the payroll for the second half of April to be paid on May 5. Gross pay is $16,200, CPP is $826, El is $305 and income tax is $3,240. 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. At the end of April, the following adjustment had to be journalized to properly report the balances of the company's accounts: For Prepaid Insurance, record the adjustment of $620 to the current month expense. Apr 30 Apr 30 For Unearned Revenue, $3,750 still remains unearned at the end of April. Apr 30 Monthly depreciation on the equipment was $1,820. 2022 General Ima PR OR O Page Date 2023 Account Title and Explanation BR Page 4 OR General Jour Date 2022 Account Title and Explanation PR DR Page 5 CR General Ledger Accounts Account Date Cash Description Opening Belance PR DR OR Account Petty Cash Date Description PR DR CR Opening Balance GL No Balance (DR or CK) 58.100.000 105 No Belance (DR or CR 0.00 Account Accounts Receivable GL Ne 130 Description PR CR Opening Balance Balance (DR or CRI 16,87000 Account Merchandise Inventory Date Description Opening Balance Account Prepaid Insurance Date Description Opening Balance GL No PR DR CR 120 Balance (DR or CR 30,240.00 OR GL No 125 PR DR CR Balance (DR or CR) 6.200.00 OR Account Date Equipment Description Opening Balance P DR C GL 140 Balance (DR or C 158.000000 Account Accumulated Depreciation Date Description PR DR CR Opening Balance GL Ne Ies Balance (Dor C) 60.000.00 Account Accounts Payable GL No 200 Date Description PR OR CR Opening Balance Balance (DR or CR 12,000.00 C Account Interest Payable GL No 205 Date Description PR OR CR Opening Balance Balance (DR or C) 0.00 C Account Date CPP Payable Description Opening Balance Account: Date Payable Description Opening Balance Account Income Tax Payable Date Description Opening Balance GL No 220 PR DR CR Balance (DR or CR 0.00 C GL No: PR DR CR 225 Balance (DR or CR 0.00 CR GL No 230 PR DR CR Balance (DR or CR) 0.00 CR Account Date Salaries Payable Description Opening Belence PR DR CL 235 Balance (DR or CR 100.000 Account Unearned Revenue GL Ne 240 Date Description P DR CR Opening Balance Balance (DR or CR) 12.500.00 CR Account Bank Loan GLN Date Description PR DR 8 Opening Balance 245 Balance (DR or CR 41.200.000 Account Common Shares GLO 300 Date Description PR DE OF Opening Balance Balance (DR or CR) 76,000.00 CR Account: Retained Earnings GL No 305 Date Description PR DR CR Opening Balance Balance (DRC) 59,610.00 CR Account Sales Revenue Date Description PR DR CR Account Date Sales Discounts Description PR DR CR GL No 400 Balance (DR or CR) GL No 405 Balance (DR or CR) Account Date Sales Returns and Allowance Description GL No 430 Balance (DR or C) Account Interest Revenue GL No 420 Date Description DR CR Balance (DR or CR Account Date Cast of Goods Sold Description GL No 500 PR DR CR Account: Date Employee Benefits Expense Description PR O CR Account Depreciation Expense Date Description PR DR CR Account Insurance Expense Date Description PR DR 550 GL No Balance (DR or C 515 GL No Balance (DR or C GL No 520 Balance (DR or C) Account: Date Interest Expense Description GL No DR CR 525 Balance (DR or CR) Account Date Office Supplies Expense Description PR DR CR GL No 530 Balance (DR or CR) Account Date Rent Expense Description Account Date Salaries Expense Description Account Date Bank Charges Expense Description Account Entertainment Expense Date Description PR DR CR GL N 335 Balance (Dar CR) GLN M DR CR 540 Balance (DR or CR PR D CR GL No 545 Balance (DR or CR) 555 Balance (DR or CR GL PR CR Account: Shipping Expense GL No 540 Date Description PR DR CR Balance (DR or CR) Account: Date Cash Over and Short Description PR DR CR GL No: 565 Balance (DR or CR Notes: 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 720 units purchased at $42.00 each Date Purchases Quantity Unit Cost Sales Value Quantity Unit Cost Value Quantity Balance Unit Cost Value Mar 31 720 42.00 30,240.00 Your accountant goes through the mail and pens Commerce. It is shown below Bank of Commerce Prepared for Lacorte bank statement for the month of April provided by Bank of Date nformation Opening Balance Apr 1 Paid Cho4500 withalposit 100.00 40700.00 34.800.00 Apr 5 Ch4502 14,000.00 Ar Deposit 17,400.00 31,400.00 For 12 Paid Chan4503 3,400.00 Apr 14 Deposit 136,438.30 Apr 15 Paid Chees 30353.00 125,485 0 Apr 18 Auto debit loan payment 22,000.00 13485 80 Apr 20 Ch 10065 425000 Apr 25 Cho4506 400.00 435.30 Apr 30 Auto debit loan payment 47.543.30 Apr 30 Service Charge 56.00 47087.30 Apr 30 Interest 42.00 47,329 ac General Ledger Accounts Account Cash Date Description Opening Balance CR GL No Balance (DR or C 58.100.000 Apr 1 Paid Cho4500 300.00 52.000.00 Apr 1 Paid Choeaso Jas 520.00 51,480.00 OR Apr 5 Paid Chu4502 Jon 600.00 50.880.00 DR Apr 12 Paid C500 12,000.00 38.880.00 DR Apr 24 Received payment GIS 703.30 124.965.80 OR A 15 Paid Chan4504 30.953.00 27.927.00 CR Ape 18 Paid inventory Choos 04 72,000.00 52,965 80 DR Apt 20 Received payment 034 3.200.00 56.165.80 DR Apr 25 Petty Cash Cho4506 GH Apr 30 Paid loan G4 400.00 1682.00 55,765 80 OR $4,073.80 DR 101 Additional Information: a) The 517.400 is already recorded in the ledger last month b) Cheque number of the company has (4) digts Required Prepare the April bank reconcilation for Lacorte inc. using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record the matjournaletries in the general journal and post the entries in the general ledger to bring the company's record up to date. Lacorte Inc. Bank Reconciliation Statement April 30, 2022 Explanation Balance per Balance per books Bank Account Titles Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Levement Accumulated Depreciation Accounts Payable Interest Payable CPP Payable Payable Income Tax Payable Salaries Payatin Unearned Revenue Bank Loan Common Shares Retained Earnings Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenue Other income Cost of Goods Sold Employee Benefits Expense Depreciation Expense Insurance Expense Unadjusted Trial Balance DR Lacorte Inc Worksheet April 30, 2022 Adatments Adjusted Trial Balance Income Statement DR CR C OR DR Balance Sheet O Interest Expense Office Supplies Expense Rent Expense Salaries Expense Bank Charges Expense Maintenance Expense Entertainment Expense Shipping Expense Cash Over and Short Total Assets Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets Lacate inc Classified Balance Sheet As at March 23, 2023 $58.100 $16,870 $30,340 56300 111410 Long Term Assets Equipment 214,000 Accumulated Depreciation 40.000 1,000 Total Assets $209,430 Current Liabilities Accounts Payable $12,000 Unearned Revenue $12,500 Salaries Payable $4,100 Current Portion of Bank Loan 517280 Total Current Liabilities $47,300 Non-Current Liabilities Non-Current Portion of Bank Loan 25.320 Total Liabilities $73,800 Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities & Equity 76,000 32.610 135.610 $309,410 Required: Using the balances of the General Ledger accounts as of April 30, complete the financial statements 1) Prepare a multistep income statement Lacorte Inc Income Statement For the Month Ended April 30, 2022 Sales Revenue Sales Discounts Net Sales Cost of Goods Sold Gross Profit Operating Expenses Employee Benefits Expense Depreciation Expense Insurance Expense Office Supplies Expense Rent Expense Salaries Expense Bank Charges Expense Shipping Expense 0.00 Total Operating Expenses Operating income Other Income and Expenses Interest Expense Interest Revenue Total Other Income and Expenses Net Income 2) Prepare a calculation of retained earnings Calculation of Retained Earnings For the Month Ended April 30, 2022 Retained Earnings, Beginning Add: Net Income Less: Dividends Retained Earnings, End 3) Prepare a classified balance sheet. Assume that $17,280 of the bank loan will be paid off in the next 12 months Assets Current Assets Cash Petty Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets Long-Term Assets Equipment Lacorte Inc Balance Sheet As at April 30, 2022 Accumulated Depreciation Total Assets Liabilities Current Liabilities Accounts Payable CPP Payable El Payable Income Tax Payable Salaries Payable Unearned Revenue Current Portion of Bank Loan Total Current Liabilities Non-Current Liabilities Non-Current Portion of Bank Loan Total Liabilities Shareholders' Equity Common Shares Retained Earnings Total Liabilities & Shareholders' Equity Calculate the current ratio as at Apr 30, 2002 Does Lacore Inc. have a good ar Calculate the inventory days on hand ratio in the formule Instead muy by 31 days) Apr 2 the month, du nu multiply by Has the ratio improved? Why or why not Calulate the debt to equity ratio as at April 30, 2022 Calculate the gross profit margin as at April 2022 What could have cause the decrease in the gross profit margin h) Calculate the inventory turnover as at April 30, 2022 Is the company holding inventory longer or for a shorter period of time