Old MathJax webview

Old MathJax webview

Old MathJax webview

The solution that is on here is not correct

Case: SquareFit - Student SquareFit owned by Chandler Bing, is an freestyle clothing retailer. You were hir and report the status of the business. They use the perpetual inventory system a method to determine value for the inventory. Its balance sheet as at January 31 SquareFit Classified Balance Sheet As at January 31, 2021 Assets Cash $35,600 Accounts Receivable 18,190 Merchandise Inventory 46.720 Prepaid Insurance 4.400 Total Current Assets Long-Term Assets Equipment 162,000 Accumulated Depreciation -52,000 Total Assets 104,910 110,000 $214.910 . Liabilities Current Liabilities Accounts Payable Unearned Revenue Salaries Payable Current Portion of Bank Loan Total Current Liabilities Non-Current Liabilities Non-Current Portion of Bank Loan Total Liabilities $14,800 $8,800 $5,700 11.160 $40,460 23,840 $64,300 81,000 Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity 69,610 150,610 ons for the month of February: Paid rent for February amounting to $660, Cheque #3354 SquareFit decided to establish a petty cash fund for the office. A cheque #3355 of $600 wa issued and cashed. Purchased merchandise from Arrow on account, invoice #425; 1100 units at $28 each. Ter of the purchase were 4/10, net 30, FOB Destination. The seller paid the shipping cost amounting to $55. Update the inventory table after each purchase. Sold mechandise to Prada, 800 units at $75 each with invoice #2341. The invoice terms 3/10, net 30, FOB Destination. Some of goods purchased from Arrow was defective. Arrow agreed to a 5% allowance on total purchased Note: You will need to adjust the Inventory Valuation to reflect the above allowance Paid total liability with a cheque #3356 to Arrow for the February 5 purchased. The employees are paid bi-weekly. Paid the payroll for the first half of February. Gross p. $12.500, CPP is $638, El is $235 and income tax is $2,500. Use the general journal to rec this. Use cheque #3357. Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Prada paid invoice #2341 on time and took advantage of the early payment discount. Note: You will need to adjust the Inventory Valuation to reflect the discount. Bought inventory from MaxMara with cheque #3358, 1400 units at $30 per unit. Sold 600 units at $90 each with invoice #2342 to ZARA. The invoice term 3/10, net 30. shipping point Received $2,230 from Gucci for a sale on account last month. The remaining balance of the petty cash account was $266. Total expenses incurred u petty cash fund this month amounting to $261. In this amount, it includes the shippin 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 Chq#3359. Made monthly bank loan payment of $1,193 which includes $930 principal and $263 Vote: You need to debit the non-current portion of the bank loan for the principal p The current portion due will remain the same as the due date for the loan is greater months from balance sheet date. employees Feb 28 Balance of Prepaid Insurance represents 11 months left on the poli of $400 to the current month expense. Feb 28 of the beginning balance of unearned revenue, $2,640 still remain Feb 28 Monthly depreciation on the equipment was $2,000. Required: a) Prepare the journal entries for the month of February b)Enter the opening balances of the accounts from the opening balance sheet post the above journal entries to the account. c) Complete the bank reconciliation report. d) Post journal entries from the bank reconciliation to general ledger account 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, h)Answer the analysis questions from 'a' to 'i'. Case: SquareFit - Student Squarefit owned by Chandler Bing, is an freestyle clothing retailer. You were hired to account the transactions and report the status of the business. They use the perpetual inventory system and use the weigted average method to determine value for the inventory. Its balance sheet as at January 31, 2021, is presented below. SquareFit Classified Balance Sheet As at January 31, 2021 Assets Cash $35,600 Accounts Receivable 18,190 Merchandise Inventory 46,720 Prepaid Insurance 4,400 Total Current Assets Long-Term Assets Equipment 162,000 Accumulated Depreciation -52,000 Total Assets 104,910 110,000 $214,910 o Liabilities Current Liabilities Accounts Payable Unearned Revenue Salaries Payable Current Portion of Bank Loan Total Current Liabilities Non-Current Liabilities Non-Current Portion of Bank Loan Total Liabilities $14,800 $8,800 $5,700 11,160 $40,460 23,840 $64,300 Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities & Equity 81,000 69,610 150,6101 $214,910 The bank loan has an annual interest rate of 9% and has monthly principal payment of $930. The inventory figure includes 1,460 units purchased at $32.00 each. II Account # 400 405 410 420 430 500 510 The Chart of Accounts (GL no.) is shown below: Account Description Account # ASSETS Cash 101 Petty Cash 105 Accounts Receivable 110 Merchandise Inventory 120 Prepaid Insurance 125 Equipment 140 Accumulated Depreciation 145 LIABILITIES Accounts Payable 200 Interest Payable 205 CPP Payable 220 EI Payable 225 Income Tax Payable 230 Salaries Payable 235 Unearned Revenue 240 Bank Loan 245 SHAREHOLDERS' EQUITY Common Shares 300 Retained Earnings 305 Account Description REVENUE Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenue Other Income EXPENSES Cost of Goods Sold Employee Benefits Expense Depreciation Expense Insurance Expense Interest Expense Office Supplies Expense Rent Expense Salaries Expense Bank Charges Expense Maintenance Expense Entertainment Expense Shipping Expense Cash Over and Short 515 520 525 530 535 540 545 550 555 560 565 X 55 A B D E F G H Feb 1 Feb 1 Paid rent for February amounting to $660, Cheque #3354 SquareFit decided to establish a petty cash fund for the office. A cheque #3355 of $600 was issued and cashed, Purchased merchandise from Arrow on account, invoice #425; 1100 units at $28 each. Terms of the purchase were 4/10, net 30, FOB Destination. The seller paid the shipping cost amounting to $55. Update the inventory table after each purchase. Feb 5 Feb 7 Sold mechandise to Prada, 800 units at $75 each with invoice #2341. The invoice terms were 3/10, net 30, FOB Destination. Feb 9 Some of goods purchased from Arrow was defective. Arrow agreed to a 5% allowance on the total purchased. Note: You will need to adjust the Inventory Valuation to reflect the above allowance Feb 12 Paid total liability with a cheque #3356 to Arrow for the February 5 purchased. Feb 15 The employees are paid bi-weekly. Paid the payroll for the first half of February. Gross pay is $12,500, CPP is $638, El is $235 and income tax is $2,500. Use the general journal to record this. Use cheque #3357. Feb 15 Record the employer's share of CPP (100%) and El (140%) of what was deducted from employees. Feb 17 Prada paid invoice #2341 on time and took advantage of the early payment discount. Feb 18 Feb 20 Feb 20 Note: You will need to adjust the Inventory Valuation to reflect the discount. Bought inventory from MaxMara with cheque #3358, 1400 units at $30 per unit. Sold 600 units at $90 each with invoice #2342 to ZARA. The invoice term 3/10, net 30, FOB shipping point Received $2,230 from Gucci for a sale on account last month. The remaining balance of the petty cash account was $266. Total expenses incurred using the petty cash fund this month amounting to $261. 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 Chq#3359 Feb 25 Made monthly bank loan payment of $1,193 which includes $930 principal and $263 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. At the end of February, the following adjustment had to be journalized to properly report the balances of the company's accounts: Feb 28 Prepared the payroll for the second half of February to be paid on March 5. Gross pay is $13,900, CPP is $709, El is $261 and income tax is $2,780. 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. Feb 28 Feb 28 Balance of Prepaid Insurance represents 11 months left on the policy. Record the adjustment of $400 to the current month expense. Feb 28 of the beginning balance of unearned revenue, $2,640 still remains unearned. Feb 28 Monthly depreciation on the equipment was $2,000. At the end of February, the following adjustment had to be journalized to properly report the balances of the company's accounts: Feb 28 Prepared the payroll for the second half of February to be paid on March 5. Gross pay is $13,900, CPP is $709, El is $261 and income tax is $2,780. 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. Balance of Prepaid Insurance represents 11 months left on the policy. Record the adjustment of $400 to the current month expense. Feb 28 Feb 28 Feb 28 of the beginning balance of unearned revenue, $2,640 still remains unearned. Feb 28 Monthly depreciation on the equipment was $2,000. Required: a) Prepare the journal entries for the month of February b)Enter the opening balances of the accounts from the opening balance sheet and post the above journal entries to the account. c) Complete the bank reconciliation report. d) Post journal entries from the bank reconciliation 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 h)Answer the analysis questions from 'a' to 'i'. > A B C D E 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 5. - B 9 Date Account Title and Explanation PR DR CR 2 3 1 5 3 9 3 1 5. B 9 1 2 3 1 Adjusting Entries Date Account Title and Explanation PR DR CR 2 General Ledger Accounts Account: Cash Date Description Opening Balance = PR DR CR GL No: 101 Balance (DR or CR) 35,600.00 DR 105 Account: Petty Cash Date Description Opening Balance PR DR CR GL No: Balance (DR or CR) 0.00 DR Account: Date Accounts Receivable Description Opening Balance PR DR CR GL No: 110 Balance (DR or CR) 18,190.00 DR Account: Merchandise Inventory Date Description PR Opening Balance DR CR GL No: 120 Balance (DR or CR) 46,720.00 DR Account: Prepaid Insurance Description Opening Balance Date PR DR CR GL No: 125 Balance (DR or CR) 4,400.00 DR Account: Equipment Date Description Opening Balance PR DR CR GL No: 140 Balance (DR or CR) 162,000.00 DR General Journal General Ledger + B D E F G H Account: Prepaid Insurance Date Description Opening Balance PR DR CR GL No: 125 Balance (DR or CR) 4,400.00 DR Account: Date Equipment Description Opening Balance PR DR CR GL No: 140 Balance (DR or CR) 162,000.00 DR GL No: 145 Account: Accumulated Depreciation Date Description PR Opening Balance DR CR Balance (DR or CR) 52,000.00 CR Account: Date Accounts Payable Description Opening Balance PR DR CR GL No: 200 Balance (DR or CR) 14,800.00 CR Account: Date Interest Payable Description Opening Balance PR DR CR GL No: 205 Balance (DR or CR) 0.00 CR Account: Date CPP Payable Description Opening Balance PR DR CR GL No: 220 Balance (DR or CR) 0.00 CR Account: Date El Payable Description Opening Balance PR DR CR GL No: 225 Balance (DR or CR) 0.00 CR Account: Date Income Tax Payable Description Opening Balance PR DR CR GL No: 230 Balance (DR or CR) 0.00 CR 9 0 Account: Interest Revenue Description GL No: 420 Balance (DR or CR) 1 Date PR DR CR 2 3 4 5 Account: Date Cost of Goods Sold Description GL No: 500 Balance (DR or CR) 6 PR DR CR 7 8 9 9 0 1 2 3 GL No: 510 Account: Employee Benefits Expense Date Description PR DR CR Balance (DR or CR) 4 5 6 7 8 9 0 Account: Depreciation Expense Date Description GL No: 515 Balance (DR or CR) 1 PR DR CR 2 3 4 5 Account: Insurance Expense Date Description GL No: 520 Balance (DR or CR) 6 PR DR CR 7 8 9 0 1 2 3 Account: Date Interest Expense Description GL No: 525 Balance (DR or CR) PR DR CR 4 Account: 5 6 7 Office Supplies Expense Description PR GL No: 530 Balance (DR or CR) Date DR CR 8 9 0 Account: Rent Expense Description GL No: 535 Balance (DR or CR) 1 Date PR DR CR 2 3 4 5 6 7 8 Account: Salaries Expense Date Description GL No: 540 Balance (DR or CR) PR DR CR 9 0 1 2 3 235 DR CR GL No: Balance (DR or CR) ( 5,700.00 CR DR CR GL No: 240 Balance (DR or CR) 8,800.00 CR DR CR GL No: 245 Balance (DR or CR) 35,000.00 CR DR CR GL No: 300 Balance (DR or CR) 81,000.00 CR 38 29 00 01 02 Account: Salaries Payable 03 Date Description PR 04 Opening Balance 05 06 07 08 Account: Unearned Revenue 09 Date Description PR 10 Opening Balance 11 12 13 14 Account: Bank Loan 15 Date Description PR 16 Opening Balance 17 18 19 Account: Common Shares 20 Date Description PR 21 Opening Balance 22 23 24 25 26 Account: Retained Earnings 27 Date Description PR 28 Opening Balance 29 30 31 Account: Sales Revenue 32 Date Description PR 33 34 35 36 37 Account: Sales Discounts 38 Date Description PR 39 40 41 42 Account: Sales Returns and Allowances 43 Description PR 44 45 46 47 48 49 50 Account: Interest Revenue 51 Date Description PR 52 DR CR GL No: 305 Balance (DR or CR) 69,610.00 CR GL No: 400 Balance (DR or CR) DR CR GL No: 405 Balance (DR or CR) DR CR GL No: 410 Balance (DR or CR) Date DR CR GL No: 420 Balance (DR or CR) DR CR A B D E F G Account: Rent Expense Description GL No: 535 Balance (DR or CR) Date PR DR CR -0 -1 2 3 4 5 6 7 -8 9 Account: Salaries Expense Description GL No: 540 Balance (DR or CR) Date PR DR CR 0 1 2 3 4 5 Account: Date Bank Charges Expense Description PR GL No: 545 Balance (DR or CR) DR CR 6 7 8 9 0 Account: Entertainment Expense Description PR GL No: 555 Balance (DR or CR) Date DR CR 1 2 3 4 5 Account: Shipping Expense Date Description GL No: 560 Balance (DR or CR) 6 PR DR CR 7 8 9 0 Account: Cash Over and Short Description GL No: 565 Balance (DR or CR) Date PR DR CR 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 fx > A B D E F G H 1 K L Use this chart to keep track of inventory values Purchases Date Quantity Unit Cost Value Quantity Sales Unit Cost Value Quantity 1,460 Balance Unit Cost Value 32.00 46,720.00