Laughing Lavender is a retail company that provides lavender decorated products (gidgets), pots, coveralls, dried flowers. The opening Classified Balance sheet for September 2020 is shown below. (146 marks) Laughing Lavender Classified Balance Sheet As at August 31, 2020 Assets Current Assets Cash $ 28,400 Accounts Receivable 2,000 Merchandise Inventory 21,500 Prepaid Rent 12,000 Total Current Assets $ Property, Plant & Equipment Equipment 42,000 Accumulated Depreciation 10,000 Total Property, Plant & Equipment Total Assets $ 63,900 32,000 95,900 $ 20,500 12,000 5,000 Liabilities Current Liabilities Accounts Payable Unearned Revenue Bank Loan, Current Portion Total Current Liabilities Long Term Liabilities Bank Loan, Long Term Portion Total Long Term Liabilities Total Liabilities $ 37,500 45,000 45,000 82,500 Owner's Equity Fred, Capital Total Owner's Equity Total Liabilities and Owner's Equity 13,400 13,400 95,900 $ The company uses the following chart of accounts to implement its accounting system. Account Description Account# Account Description Account # ASSETS Cash Accounts Receivable Prepaid Rent Merchandise Inventory Equipment Accum. Depreciation - Equip REVENUE Sales Sales Retums & Allowances Sales Discounts 400 401 402 101 106 110 115 120 125 EXBNESS LIABILMES Accounts Payable Interest Payable Salary Payable Uneared Revenue Bank Loan 200 206 210 215 220 Cost of Goods Sold Advertising Expense Depreciation Expense Insurance Expense Interest Expense Maintenance Expense Office Supplies Expense Rent Expense Salaries Expense Shipping Expense Utilities Expense 500 506 510 515 520 525 530 525 540 545 580 OWNERS EQUITY Fred, Capital Fred, Withdrawals Income Summary 300 310 315 For the month of September 2020, Laughing Lavender had the following transactions: Sept5 Sept 14 Sept 14 Sept 15 Sept 16 Sep 17 Sept 18 Sept 20 Purchased 100 gidgets at $24.50 each on account (with terms 2/10, 1/30) Sold merchandise on credit to Bee-Kind Hives for $6,325 (115 gidgets for $55 each); terms 4/15,1/30: cost of goods sold was $2,713.55 (115 gidgets for $23.60 each) Laughing Lavender paid $120 to ship the goods to Bee-Kind Hives (FOB destination) Paid wages of $2,500 Bee-Kind Hives returned $1,100 (sales price) worth of merchandise purchased on Sept 14; cost of goods sold for the 20 retumed gidgets (use your inventory schedule for amount); goods were returned to inventory Received payment from Bee-Kind Hives for Sept 14 sale Purchased 175 gidgets at $25.50 each on account Incurred $1,000 in utilities expenses, to be paid next month Sold $17,875 worth of merchandise for cash (325 gidgets for $55 each); inventory cost (use your inventory schedule for amount) Paid the balance owed to the supplier for gidgets purchased on Sept 5 Paid the balance owed to the supplier for gidgets purchased on Sept 18 Received $2,000 cash from sales previously made on account Sept 22 Sept 25 Sept 26 Sept 29 At the end of September, the following adjustments need to be journalized to properly report the balances of the company's accounts. Sept 30 Prepaid rent represents one year of retail space rent; one month of prepaid rent has been used Sept 30 Monthly depreciation on equipment $450 Sept 30 Uneamed revenue worth $1,200 has now been eamed Sept 30 Interest of $75 has accrued on the bank loan Sept 30 Accrued salary expense of $500 for an employee Note: of the remaining balance of the bank loan $5,000 will be paid within the next year. Laughing Lavender uses the perpetual inventory system and the Weighted Average system. Septembers opening inventory was 915 gidgets The opening balance in Accounts receivable is all for Alpaca Farms. Required a) Enter the balances from the September 2020 Classified Balance Sheet into the Trial Balance Worksheet (6 marks) b) Create an inventory schedule using the above transactions. Calculate Ending Inventory, OOGS, Revenue & Gross Profit Hint: this schedule should equal your Cost of Goods Sold on your Financial Statements (40 marks) c) Prepare the journal entries for the transactions that took place during the month of September and post them to the appropriate general ledger accounts on the Trial Balance Worksheet. (25 marks) d) Create the following Specialized Journals: Sales Joumal, Cash Receipts Journal and update with transactions from above. Post the amounts into the Accounts Receivable Control and Subsidiary ledger accounts. (20 marks) e) Prepare the month end joumal entries for the month of September and post them to the appropriate general ledger accounts on the Trial Balance Worksheet. (11 marks) 0 Prepare the journal entries to close the books for the month of September 2020 (use the income summary account) and post them to the appropriate general ledger accounts on the Trial Balance Worksheet (13 marks) 9 Prepare a Multistep Income Statement. All expenses are allocated as follows - Retail 65% and Office 35%. (12 marks) h) Prepare the statement of owner's equity. (4 marks) D. Prepare the classified balance sheet (11 marks) If Laughing Lavender used the FIFO inventory valuation method, instead of the Weighted Average Method what would be the cost of Goods Sold, Ending Inventory and Gross Profit amounts? (4 marks) D