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Donna Designs Ltd. is an importer of high-end home furnishings. The company had the following transactions during January 2021 which have yet to be recorded: Jan. 8 Collected a note receivable from a customer. The note, which was for $50,000, had been issued to a customer in November 2020. It was a two-month note, with 12% interest due at maturity. On December 31, 2020, Donna correctly accrued the $1,000 in interest income earned to December 31, 2020. (Note that interest is calculated to the nearest half month.) 14 Wrote off the account of a customer who declared bankruptcy. The customer had owed Donna $18,000. 15 Agreed to accept a note receivable from a customer who was unable to pay its account receivable balance. The $20,000, two-month note bears interest at 9% and interest is due at maturity. 19 Received a $9,000 payment from a customer whose account had been written off in 2020. 31 Donna's aged accounts receivable subsidiary ledger was classified as follows: Classification of Accounts Amount Estimated Uncollectible % Current ( 90 days 20,000 12% 31 In addition, an adjusting entry to accrued the interest receivable on the note receivable from January 15 (which had been outstanding for half a month) was still required. Donna records adjustments monthly on the last day of the month. Donna reconciles its bank account at the end of every month and makes any necessary journal entries. The following information was gathered from reviewing the company's bank statement for the month of January: The service charges on the account were $128 for the month. There were outstanding cheques of $67,000. A cheque from one of Donna's customers for $12,100 that had been deposited during the month was returned by the bank because the customer had insufficient funds in their account. The company's account balance at January 31 was $328,772 according to the bank statement. . Instructions a) Record the January transactions and adjusting entries as listed above on the journal paper provided. (Explanations not required) Coal Agata Donna Designs Ltd. is an importer of high-end home furnishings. The company had the following transactions during January 2021 which have yet to be recorded: Jan. 8 Collected a note receivable from a customer. The note, which was for $50,000, had been issued to a customer in November 2020. It was a two-month note, with 12% interest due at maturity. On December 31, 2020, Donna correctly accrued the $1,000 in interest income earned to December 31, 2020. (Note that interest is calculated to the nearest half month.) 14 Wrote off the account of a customer who declared bankruptcy. The customer had owed Donna $18,000. 15 Agreed to accept a note receivable from a customer who was unable to pay its account receivable balance. The $20,000, two-month note bears interest at 9% and interest is due at maturity. 19 Received a $9,000 payment from a customer whose account had been written off in 2020. 31 Donna's aged accounts receivable subsidiary ledger was classified as follows: Classification of Accounts Amount Estimated Uncollectible % Current ( 90 days 20,000 12% 31 In addition, an adjusting entry to accrued the interest receivable on the note receivable from January 15 (which had been outstanding for half a month) was still required. Donna records adjustments monthly on the last day of the month. Donna reconciles its bank account at the end of every month and makes any necessary journal entries. The following information was gathered from reviewing the company's bank statement for the month of January: The service charges on the account were $128 for the month. There were outstanding cheques of $67,000. A cheque from one of Donna's customers for $12,100 that had been deposited during the month was returned by the bank because the customer had insufficient funds in their account. The company's account balance at January 31 was $328,772 according to the bank statement. Instructions a) Record the January transactions and adjusting entries as listed above on the journal paper provided. (Explanations not required) b) Post the general journal entries prepared in part (a) to the accounts of Cash, Accounts Receivable, Allowance for Doubtful Accounts, Note Receivable and Interest Receivable. (To reduce the time required for this assignment, only these selected ledger accounts need posting) c) Prepare the bank reconciliation at January 31. d) Prepare the journal entries required as a result of the bank reconciliation and post them as needed to the cash ledger. e) Complete an adjusted trial balance at January 31 using the form provided. f) Prepare the asset section of the balance sheet for January 31. Use classifications. a) 12 marks Date Particulars Debit Credit (b) Selected Ledger Accounts: 5 marks Cash 197,000 Jan. 12 Dec. 31 Bal. 26,000 Jan. 4 236,000 Jan. 24 150,000 Jan. 23 92,000 Jan. 25 Jan. 26 Jan. 31 117,000 1,000 17,000 Unadj. Bal. Jan. 31 bank rec Bal. Jan. 31 Dec. 31 Bal. Jan. 10 Jan. 23 Accounts Receivable 468,000 Jan. 4 188,000 Jan. 17 92,000 236,000 4,000 Bal. Jan 31 Allowance for Doubtful Accounts Dec. 31 Bal. 13,000 Jan. 31 Bal. Notes Receivable 50,000 Dec. 31 Bal. Bal. Jan. 31 Interest Receivable 1,000 Dec. 31 Bal. Bal. Jan. 31 Supporting Schedules: Aging Schedule for Accounts Receivable: 2 marks Estimated Uncollectible Accounts Number of Days Outstanding 0-30 days 31-60 days 61-90 days Over 90 days Total Accounts Receivable $280,000 130,000 40,000 20.000 $470,000 Estimated Percentage Uncollectible 2% 5% 6% 12% (C) 7 marks DONNA DESIGNS LTD. Bank Reconciliation January 31, 2021 Balance per bank statement.. Reconciled cash balance per bank. $ Balance per books (from T account part (b). $ Reconciled cash balance per books. (e) 4 marks DONNA DESIGNS LTD. Adjusted Trial Balance January 31, 2021 Debit Credit 2,777,000 12,250 1,560,000 Cash Accounts receivable Allowance for doubtful accounts Notes receivable Inventory Prepaid insurance Interest receivable Equipment Accumulated depreciation-equipment Accounts payable Income tax payable Salaries payable Deferred revenue Bank loan payable Capital, Donna Debois Sales Cost of goods sold Depreciation expense Salaries expense Insurance expense Bad debts expense Bank charges expense Interest income Interest expense Income tax expense 985,000 419,000 24,000 36,000 34,000 785,000 2,729,000 378,000 194,000 13,000 46,000 1,750 128 2,000 24.000 $ (f) DONNA DESIGNS LTD. Balance Sheet January 31, 2021 Assets