On May 31 2021, Randy Conway of Conway Uniforms began preparing his year end. Randy hadn't completed his journal entries in May, they are: Conway did a physical count of their inventory. They had 100 uniforms that 01-May they originally purchased for $18. No journal entry required. 03-May Lendrum paid their balance in full. Deposit 5 04-May Purchased 150 uniforms for $18 each to resell as inventory. Cheque 9 06-May Purchased 190 uniforms for $26 each to resell as inventory. Cheque 10 08-May Sold 110 uniforms to Lendrum for $40 a unit. 1/10, n30, FOB Shipping 11-May Purchased 150 uniforms for $18 each to resell as inventory. Cheque 11 13-May Sold 165 uniforms to Norton Electric for $40 a unit cash Deposit 6 15-May Advertised in the paper for $550 Cheque 12 18-May Starburst paid a portion of their bill of $10,000 Deposit 7 20-May Paid out mileage expense for 750km @ $0.60 per km Cheque 13 22-May Purchased 310 uniforms for $25 each to resell as inventory. Cheque 14 25-May Sold 180 uniforms to Whistler Resort for $40 a unit. 1/10, n30, FOB Shipping 28-May Withdrew $2400 cash. Cheque 15 Dinwoody Entertainment put a deposit down for uniforms to be ordered 31-May next month of $1,200. Deposit 8 Deposit 8 The adjusting entries are also required: 31-May The inventory of office supplies was at $320 according to a count. 31-May Two months of the prepaid insurance has passed. 4 remain. Five months have passed for office equipment depreciation which has a 10-year 31-May life with no residual value. 31-May Donald Gee is owed 7 days work. 31-May Bad Debt Allowance Adjustment The bank statement for May 2021 was: MAY 2021 BANK STATEMENT Date Cheque/Deposit # Amount Balance 01-May Open 44,260 03-May NSF Cheque - Starbust -2,000 42,260 05-May Deposit 5 4,260 46,520 08-May Cheque 9 -2,700 43,820 10-May Cheque 10 -4,940 38,880 14-May Deposit 6 6,600 45,480 18-May Deposit 7 10,000 55,480 21-May Cheque 13 -450 55,030 31-May Interest Income 12 55,042 31-May Bank Charges -35 55,007 There were no outstanding cheques or deposits in transit on the April bank reconciliation. The Accounts Receivable balances and days since invoicing on April 30 were: Accounts Receivable Days since Invoicing Oldest Bill Balance Kinsetta Groceries 88 2,640 Gillette Industries 45 4,450 Norton Electric 10 2,260 Whistler Resort 26 1,120 Starburst Inc. 54 14,780 Dinwoody Entertainment Sharp Co. 73 3,610 Lendrum Sales 49 4,260 Fashion Incorporated 48 1,640 Conway gave all customers 30 days from invoicing to pay their bill before their accounts became overdue. Conway followed the aging analysis of approach to estimating bad debt. With advice from his accountants, this were the estimates he used to determine his bad debt expense: Current - 1% 1-30 days overdue -2% 31 -60 days overdue - 6% 61+ days overdue - 10% For the ease of estimation, if a customer had multiple bills overdue, Conway would use the oldest bill and apply the percentage to all outstanding accounts. The chart above is days since invoicing the oldest bill outstanding. Randy's Trial Balance on April 30 is as follows: Account Number Account Name Dr Cr 101 44,260 106 106.1 106.2 1063 2.640 4,450 2.260 1,120 14,780 106.4 II 106.5 106.6 106.7 106.8 3,610 4,260 1,640 1069 108 1,700 119 126 1,800 780 450 12.000 128 163 252 164 168 181 16,000 4,000 3,500 27,000 191 192 201 ash Accounts Receivable Kinsetta Groceries Gillette Industries Norton Electric Whistler Resort Starburst Inc. Din woody Entertainment Sharp Co. Lendrum Sales Fashion Incorporated Allowance for Doubtful Accounts Merchandise Inventory Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation, Office Equipment Computer Equipment Trademark Note Receivable due 2024 Land for Future Expansion Accumulated Depreciation, Computer Equipment Accounts Payable Wages Payable Une arned Computer Services Revenue Randy Conway, Capital Randy Conway, Withdrawals Sales Sales Discounts Sales Returns and Allowances Interest Income Cost of Goods Sold Depreciation Expense, Office Equipment (general and Wages Expense (sales) Insurance Expense (general and administrative) Rent Expense (70% sales, 30%office) Office Supplies Expense (general and administrative) Advertising Expense (sales) Mileage Expense (sales) Repairs Expense, Computer (general and administrative Bank Charges (general and administrative) Bad Debt Expense (sales) Charitable Donations Expense (sales) 450 11,600 210 236 301 302 143,660 403 2.200 414 27,640 415 360 440 499 502 250 612 613 637 14,680 252 13,640 640 652 3,600 655 676 684 1.850 2,200 880 340 689 695 697 699 560 185,552 185,552 The General Ledger is not up to date, be sure to include the amounts from the trial balance above to the first line of the General Ledger. 4) Prepare the necessary adjusting entries for May 30, 2018. Including the receivables adjustment. 5 marks 5) Prepare a Multi-step Income Statement for January 1, 2021 May 31, 2021. 8 marks 6) Close the temporary accounts and post them to the ledger. 6 marks 7) Prepare a Classified Balance Sheet as of May 30, 2021. 8 marks A general ledger and an adjusted trial balance page has been added to assist you in this case but will not be marked. On May 31 2021, Randy Conway of Conway Uniforms began preparing his year end. Randy hadn't completed his journal entries in May, they are: Conway did a physical count of their inventory. They had 100 uniforms that 01-May they originally purchased for $18. No journal entry required. 03-May Lendrum paid their balance in full. Deposit 5 04-May Purchased 150 uniforms for $18 each to resell as inventory. Cheque 9 06-May Purchased 190 uniforms for $26 each to resell as inventory. Cheque 10 08-May Sold 110 uniforms to Lendrum for $40 a unit. 1/10, n30, FOB Shipping 11-May Purchased 150 uniforms for $18 each to resell as inventory. Cheque 11 13-May Sold 165 uniforms to Norton Electric for $40 a unit cash Deposit 6 15-May Advertised in the paper for $550 Cheque 12 18-May Starburst paid a portion of their bill of $10,000 Deposit 7 20-May Paid out mileage expense for 750km @ $0.60 per km Cheque 13 22-May Purchased 310 uniforms for $25 each to resell as inventory. Cheque 14 25-May Sold 180 uniforms to Whistler Resort for $40 a unit. 1/10, n30, FOB Shipping 28-May Withdrew $2400 cash. Cheque 15 Dinwoody Entertainment put a deposit down for uniforms to be ordered 31-May next month of $1,200. Deposit 8 Deposit 8 The adjusting entries are also required: 31-May The inventory of office supplies was at $320 according to a count. 31-May Two months of the prepaid insurance has passed. 4 remain. Five months have passed for office equipment depreciation which has a 10-year 31-May life with no residual value. 31-May Donald Gee is owed 7 days work. 31-May Bad Debt Allowance Adjustment The bank statement for May 2021 was: MAY 2021 BANK STATEMENT Date Cheque/Deposit # Amount Balance 01-May Open 44,260 03-May NSF Cheque - Starbust -2,000 42,260 05-May Deposit 5 4,260 46,520 08-May Cheque 9 -2,700 43,820 10-May Cheque 10 -4,940 38,880 14-May Deposit 6 6,600 45,480 18-May Deposit 7 10,000 55,480 21-May Cheque 13 -450 55,030 31-May Interest Income 12 55,042 31-May Bank Charges -35 55,007 There were no outstanding cheques or deposits in transit on the April bank reconciliation. The Accounts Receivable balances and days since invoicing on April 30 were: Accounts Receivable Days since Invoicing Oldest Bill Balance Kinsetta Groceries 88 2,640 Gillette Industries 45 4,450 Norton Electric 10 2,260 Whistler Resort 26 1,120 Starburst Inc. 54 14,780 Dinwoody Entertainment Sharp Co. 73 3,610 Lendrum Sales 49 4,260 Fashion Incorporated 48 1,640 Conway gave all customers 30 days from invoicing to pay their bill before their accounts became overdue. Conway followed the aging analysis of approach to estimating bad debt. With advice from his accountants, this were the estimates he used to determine his bad debt expense: Current - 1% 1-30 days overdue -2% 31 -60 days overdue - 6% 61+ days overdue - 10% For the ease of estimation, if a customer had multiple bills overdue, Conway would use the oldest bill and apply the percentage to all outstanding accounts. The chart above is days since invoicing the oldest bill outstanding. Randy's Trial Balance on April 30 is as follows: Account Number Account Name Dr Cr 101 44,260 106 106.1 106.2 1063 2.640 4,450 2.260 1,120 14,780 106.4 II 106.5 106.6 106.7 106.8 3,610 4,260 1,640 1069 108 1,700 119 126 1,800 780 450 12.000 128 163 252 164 168 181 16,000 4,000 3,500 27,000 191 192 201 ash Accounts Receivable Kinsetta Groceries Gillette Industries Norton Electric Whistler Resort Starburst Inc. Din woody Entertainment Sharp Co. Lendrum Sales Fashion Incorporated Allowance for Doubtful Accounts Merchandise Inventory Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation, Office Equipment Computer Equipment Trademark Note Receivable due 2024 Land for Future Expansion Accumulated Depreciation, Computer Equipment Accounts Payable Wages Payable Une arned Computer Services Revenue Randy Conway, Capital Randy Conway, Withdrawals Sales Sales Discounts Sales Returns and Allowances Interest Income Cost of Goods Sold Depreciation Expense, Office Equipment (general and Wages Expense (sales) Insurance Expense (general and administrative) Rent Expense (70% sales, 30%office) Office Supplies Expense (general and administrative) Advertising Expense (sales) Mileage Expense (sales) Repairs Expense, Computer (general and administrative Bank Charges (general and administrative) Bad Debt Expense (sales) Charitable Donations Expense (sales) 450 11,600 210 236 301 302 143,660 403 2.200 414 27,640 415 360 440 499 502 250 612 613 637 14,680 252 13,640 640 652 3,600 655 676 684 1.850 2,200 880 340 689 695 697 699 560 185,552 185,552 The General Ledger is not up to date, be sure to include the amounts from the trial balance above to the first line of the General Ledger. 4) Prepare the necessary adjusting entries for May 30, 2018. Including the receivables adjustment. 5 marks 5) Prepare a Multi-step Income Statement for January 1, 2021 May 31, 2021. 8 marks 6) Close the temporary accounts and post them to the ledger. 6 marks 7) Prepare a Classified Balance Sheet as of May 30, 2021. 8 marks A general ledger and an adjusted trial balance page has been added to assist you in this case but will not be marked