Please help with General Journal, General Ledger, Inventory Valuation, Bank reconciliation and Financial statements
Q-A 616 X C D E H F 1 Case: Northern Reflections 5 Northern Reflections sells outdoor sporting me ou have been working for the company since its 4 inception a few years ago and have been promove their accounting manager. They use the perpetual 5 inventory systern and use the weigted average Mahod to determine value for the inventory. 6 The opening balances for the month of September are as follows: 9 10 Northern Reflections 11 Balance Sheet 12 As at September 30, 2020 3 Assets 14 Current Assets 15 Cash $27 200 16 Accounts Receivable 16 000 17 Merchandise Inventory 13 000 18 Total Current Assets S6 200 19 Proptery. Plant & Equipment 20 (quipment 130 000 21 Accumulated Depreciation -25.000 95000 22 Total Assets $151 200 23 24 Libilities 25 Current Liabilities 26 Accounts Payable SIG 200 27 Current Portion of Bank Loan 606 28 Total Current Liabilities 522 200 29 Non-Cuttent Labilities 30 Non Current Pantal Bank Loan 1000 131 Total Liabilities SLO 200 52 Shareholders Lquity 33 Contas 50 000 34 Running GLA 35Truide 36 Total Libilities & Co 1 Case Introduction Transactions General Journal - 2 G16 X 1 1 B D E H 31 Total Liabilities 0 700 32 Shareholders' Equity 33 Common Shares 50 000 34 Retained Earnings 61 000 35 Total Shareholders' Equity 111000 36 Total Liabilities & Equity $151 200 477 The bank loan has an annual interest rate of 5% and has monthly principal payment of $500, 48 BHA41 Account 400 405 410 420 500 510 61 The Chart of Accounts Glino. is shown below: 52 Account Description Account 63 ASSETS 64 Cash 101 65 Petty Cash 105 56 Accounts Receivable 110 67 Merchandise Inventory 120 68 Prepaid Insurance 125 59 Equipment 140 70 Accumulated Depreciation 71 LIABILITIES 72 Accounts Payable 200 73 Interest Payable 205 74 CPP Payable 220 75 I Payable 225 76 income Tax Payable 230 77 Salarios Payable 235 78 Unearned Revenu 240 79 Bank Loan 80 SHAREHOLDERS' EQUITY 81 Carrmon Shares 300 FO Account Description REVENUE Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenge EXPENSES Cost of Goods Suld Employee Benefits Expense Depreciation Experise Insurance Expense Interest Expense Office Supplies Expense Rent Expense Salaries Expanse Bank Charges Experise Maintenance Expense Entertainment Expense 515 520 525 530 535 540 545 550 555 54 35 DO Case Introduction Transactions General Journal ACCT1100 Individual Assignment 2 Fall 2020 Student MLE - Meno Calibri 10 AA == *** 40-A- 33 Hlyan Bop % .. Crne Land MO J25 D F G H 1 Transactions for the month of October 2 3 Oct 1 Bought inventory from Outdoor Muzi on account, invoice #5455, 900 units at $28 each 4 Terms of the purchase were 4/10, net 30 Update the inventory table after each purchase 5 Oct 2 Sold goods to Outback Kian, 600 units at $80 each with invoice $4741. The invoice terms 6 were 5/10, net 30. Update the inventory table after each sale 7 Octs Paid 51100, with cheque #143 to Outdoor Muzl for an amount owing from last month 8 Oct 5 Bought inventory from Climb Foe with cheque 144,650 units at $29 per unit 9 Oct Returned 150 defective units to climb Foe and received cash 10 Octs Received $800, from Firewood Bill for sale on account last month 11 Oct 10 Outback Kian paid invoice #4741 on time and took advantage of the early payment discount 12 13 Prepared the payroll for October. Gross pay is $8000, cpp is $408. Elis 5150, and income 14 Oct 31 tax is $1600. The employer matches CPP contributions and pays 14 times the Eldeduction 15 Use the general Journal to record this. The cheque will be prepared later 16 Oct 31 interest 17 18 Required: 19 Record the transactions above in the general Journal and then post mounts to the General Ledger 20 Note Also remember to enter your posting references 21 22 23 Cose introduction Transactions General Journal General Ledger netary Valuation E M acer Case: Northern Reflections Northern Reflections as outdoor sporting equipment. You have been working for the company since its Inception a few years ago and have been promoted to be their accounting manager. They use the perpetual Inventory system and use the weigted average method to determine value for the inventory The opening balances for the month of September are as follows: Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13.000 Total Current Assets 56.2001 Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35.000 95.00 Total Assets $151,200 Account Liabilities Current Liabilities Accounts Payable $16,200 Current Portion of Bank Loan 6,000 Total Current Liabilities $22.200 Non-Current abilities Non-Current Portion of Bank Loan 18.000 Total Liabilities $40,200 Shareholders' Equity Common Shares 50,000 Retained Earnings 61.000 Total Shareholders' Equity 11.000 Total Liabilities & Equity $151,200 The bank loan has an annual interest rate of 5% and has monthly principal payment of $500 The inventory figure includes 500 units purchased at $26.00 each The Chart.cf Accounts (Gl no. His shown below Account Description Account Account Description ASSETS REVENUE Cash 101 Sales Revenue Petty Cash 105 Sales Discounts Accounts Receivable 110 Sales Returns and Allowances Merchandise Inventory 120 Interest Revenue Prepaid Insurance 125 EXPENSES Equipment 140 Cost of Goods Sold Accumulated Depreciation 185 Employee Benefits Expense LIABILITIES Depreciation Experte Accounts Payable 200 Insurance Expense interest Payable 205 Interest Expense CPP Pavable 220 Office Supplies Expense E Payable 225 Rent Espente Income Tax Payable 230 Salaries Eupene Salaries Payable 235 Bank Charges Expense Unearned Revenue 240 Maintenance Expense Bank loan 245 Entertainment Expense SHAREHOLDERS' EQUITY Common Shares 100 Retained Earning 305 400 405 410 420 500 510 515 520 525 530 535 540 545 550 555 Transactions for the month of October: Oct 1 Oct 2 Oct 5 Oct 5 Oct 7 Oct 8 Bought inventory from Outdoor Muzi on account, invoice #5455; 900 units at $28 each. Terms of the purchase were 4/10, net 30. Update the inventory table after each purchase. sold goods to Outback Kian, 600 units at $80 each with invoice #4741. The invoice terms were 5/10, net 30. Update the inventory table after each sale. Paid $1,100 with cheque #143 to Outdoor Muzi for an amount owing from last month. Bought inventory from Climb Foe with cheque #144, 650 units at $29 per unit. Returned 150 defective units to Climb Foe and received cash. Received $800 from Firewood Bill for a sale on account last month. Outback Kian paid invoice #4741 on time and took advantage of the early payment discount. Prepared the payroll for October, Gross pay is $8,000, CPP is $408, El is $150 and income tax is $1,600. The employer matches CPP contributions and pays 1.4 times the El deduction. Use the general journal to record this. The cheque will be prepared later. Made monthly bank loan payment of $600 which includes $500 principal and $100 interest Oct 10 Oct 31 Oct 31 Required: Record the transactions above in the general journal and then post amounts to the General Ledger. Note: Also remember to enter your posting references. Date Gelora Account Title and Explanation a General Journal Accountide and Caplanation Date 101 General Ledger Accounts Account: Cash Date Description Opening Balance PR DR CR GL NO: Balance (DR or CR) 27,200.00 DR Account: Date Petty Cash Description Opening Balance PR DR CR GL NO: 105 Balance (DR or CR) 0.00 OR Account: Date Accounts Receivable Description Opening Balance PR DR CR GL NO: 110 Balance (DR or CR) 16,000.00 DR Account: Date Merchandise Inventory Description PR Opening Balance DR CR GL No: 120 Balance (DR or CR) 13,000.00 DR Account: Date Prepaid Insurance Description Opening Balance PR DR CR GL No: 125 Balance (DR or CR) 0.00 DR 140 Account: Date Equipment Description Opening Balance PR DR CR GL No: Balance (DR or CR) 130,000.00 DR Account: Date Accumulated Depreciation Description PR Opening Balance DR CR GL No: 145 Balance (DR or CR) 35,000.00 CR Account: Date Accounts Payable Description Opening Balance PR DR CR GL No: 200 Balance (DR or CR) 16.200.00 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 Account: Date Salaries Payable Description Opening Balance PR DR CR GL No: 235 Balance (DR or CR) 000 CR Account: Date Unearned Revenue Description Opening Balance PR DR CR GL No: 240 Balance (DR or CR) 0.00 CR Account: Date Bank Loan Description Opening Balance PR DR CR GL NO: 245 Balance (DR or CR) 24,000.00 CR Account: Date Common Shares Description Opening Balance PR DR CR GL No: 300 Balance (DR or CR) 50,000.00 CR Account: Date Retained Earnings Description Opening Balance PR DR CR GL No: 305 Balance (DR or CR) 61,000.00 CR Account: Date Sales Revenue Description GL NO: 400 Balance (DR or CR) PR DR CR Account: Date Sales Discounts Description GL NO: 405 Balance (DR or CR) PR DR CR Account: Date Sales Returns and Allowances Description PR DR GL No: 410 Balance (DR or CR) CR Account: Interest Revenue Description GL No: 420 Balance (DR or CR) Date PR DR CR Account: GL. 500 Cost of Goods Sold Description PR DR OR Account 10 Date Employee Benefits Expense Description PR DR CH Balance GL.NO SIS Account: Date Depreciation Expense Description PR OR CR GEN Account Insurance Expense Date Description DR O Account: GUNCE 525 Interest Expense Description PR DR CH Account Data Office Supplies Expense Description PR DR Balance Account: Date Rent Expense Description GL Balance PR D CR Account: Date Description GL Ne Balance PR OR G Account Date Bank Charges Expense Description GEN BD OCH PR DR Account: Date Entertainment Expense Desertion FR GL M WS SO DA CR lt) Use this chart to keep track of transactions that involved inventory values Purchases Sales Date Quantity Unit Cost Value Quantity Unit Cost Value Balance Quantity Unit Cost 500 26.00 Value 13,000.00 Note: Don't forget to reduce the inventory account for the purchase return on Oct. 7 ii) Using the following information, prepare the bank reconciliation for October 31, 2020 Your staff accountant goes through the mail and opens the bank statement for the month of October provided by Fanshav Bank. It is shown below. Fanshawe Local Bank Prepared for Northern Reflections Date Information Withdrawal Deposit Balance Opening Balance 13,000.00 Oct 2 Deposit 14,200.00 27,200.00 Oct 5 Ch#143 1,100.00 26,100.00 Oct 8 Deposit 45,600.00 71,700.00 Oct 8 Deposit 4,350.000 76,050.00 Oct 11 Ch#8240 2,400.00 73,650.00 Oct 31 Service Charge 60.00 73,590.00 Oct 31 Interest 5.00 73,595.00 Cash 101 PR DR CR General Ledger Accounts Account: Date Description Opening Balance Oct 5 Ch#143 Oct 5 Cha#144 Oct 7 Return of inventory Oct 8 Deposit Oct 10 Deposit GJ3 GJ3 G3 G13 GJ3 GL No: Balance (DR or CR) 27,200.00 DR 1,100.00 26,100.00 DR 18,850.00 7,250.00 CR 11,600.00 CR 12,400.00 ICR 58,000.00 DR 4,350.00 800.00 45,600.00 Additional Information: a) The $14,200 is already recorded in the ledger last month. b) Cheque number of the company has only three (3) digits. Required: Prepare the October bank reconciliation for Northern Reflections using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record the relevant journal entries in the general journal and post the entries in the general ledger to bring the company's record up to date. NOTE: DON'T FORGET TO RECORD ANY JOURNAL ENTRIES RESULTING FROM THE BANK RECONCILIATION IN THE GENERAL JOURNAL AND POST TO THE RELEVANT LEDGER ACCOUNTS Northern Reflections Bank Reconciliation Statement October 31, 2020 Cash balance per bank statement: Cash balance per books: Add: Add: Deduct: Deduct: Adjusted Bank Balance Adjusted Bank Balance iv) Prepare the financial statements for the month ended October 31, 2020. Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13,000 Total Current Assets Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35.000 Total Assets 56,200 95.000 $151,200 $16,200 6.000 $22,200 Liabilities Current Liabilities Accounts Payable 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 Shareholders' Equity Total Liabilities & Equity 18.000 $40,2001 50,000 61.000 111.000 $151,200 1) Prepare a multistep income statement Northern Reflections Income Statement For the Month Ended October 31, 2020 2) Prepare a calculation of retained earnings Calculation of Retained Earnings For the Month Ended October 31, 2020 3) Prepare a classified balance sheet. Assume that $6,000 of the bank loan will be paid off in the next year. Northern Reflections Balance Sheet As at October 31, 2020 V) Based on the information above, answer the following questions a) Calculate the current ratio as at October 31, 2020 b) Does Northern Reflections have a good or bad current ratio? Explain why or why not. c) Calculate the inventory days on hand ratio as at October 31, 2020. (Since this is for the month, do not multiply by 365 in the formula. Instead multiply by 31 days) d) Last month, the inventory days on hand ratio was 37 days. Has the ratio improved? Why or why not? e) Calculate the debt to equity ratio as at October 31, 2020 Calculate the gross profit margin as at October 31, 2020 B) Last month, the gross profit margin percentage was 75%. What could have caused this decrease in gross margin percentage? hy Calculate the inventory turnover as at October 31, 2020. if inventory turnover last month was 0.837, is the company holding on to inventory for a longer or shorter period of time? Q-A 616 X C D E H F 1 Case: Northern Reflections 5 Northern Reflections sells outdoor sporting me ou have been working for the company since its 4 inception a few years ago and have been promove their accounting manager. They use the perpetual 5 inventory systern and use the weigted average Mahod to determine value for the inventory. 6 The opening balances for the month of September are as follows: 9 10 Northern Reflections 11 Balance Sheet 12 As at September 30, 2020 3 Assets 14 Current Assets 15 Cash $27 200 16 Accounts Receivable 16 000 17 Merchandise Inventory 13 000 18 Total Current Assets S6 200 19 Proptery. Plant & Equipment 20 (quipment 130 000 21 Accumulated Depreciation -25.000 95000 22 Total Assets $151 200 23 24 Libilities 25 Current Liabilities 26 Accounts Payable SIG 200 27 Current Portion of Bank Loan 606 28 Total Current Liabilities 522 200 29 Non-Cuttent Labilities 30 Non Current Pantal Bank Loan 1000 131 Total Liabilities SLO 200 52 Shareholders Lquity 33 Contas 50 000 34 Running GLA 35Truide 36 Total Libilities & Co 1 Case Introduction Transactions General Journal - 2 G16 X 1 1 B D E H 31 Total Liabilities 0 700 32 Shareholders' Equity 33 Common Shares 50 000 34 Retained Earnings 61 000 35 Total Shareholders' Equity 111000 36 Total Liabilities & Equity $151 200 477 The bank loan has an annual interest rate of 5% and has monthly principal payment of $500, 48 BHA41 Account 400 405 410 420 500 510 61 The Chart of Accounts Glino. is shown below: 52 Account Description Account 63 ASSETS 64 Cash 101 65 Petty Cash 105 56 Accounts Receivable 110 67 Merchandise Inventory 120 68 Prepaid Insurance 125 59 Equipment 140 70 Accumulated Depreciation 71 LIABILITIES 72 Accounts Payable 200 73 Interest Payable 205 74 CPP Payable 220 75 I Payable 225 76 income Tax Payable 230 77 Salarios Payable 235 78 Unearned Revenu 240 79 Bank Loan 80 SHAREHOLDERS' EQUITY 81 Carrmon Shares 300 FO Account Description REVENUE Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenge EXPENSES Cost of Goods Suld Employee Benefits Expense Depreciation Experise Insurance Expense Interest Expense Office Supplies Expense Rent Expense Salaries Expanse Bank Charges Experise Maintenance Expense Entertainment Expense 515 520 525 530 535 540 545 550 555 54 35 DO Case Introduction Transactions General Journal ACCT1100 Individual Assignment 2 Fall 2020 Student MLE - Meno Calibri 10 AA == *** 40-A- 33 Hlyan Bop % .. Crne Land MO J25 D F G H 1 Transactions for the month of October 2 3 Oct 1 Bought inventory from Outdoor Muzi on account, invoice #5455, 900 units at $28 each 4 Terms of the purchase were 4/10, net 30 Update the inventory table after each purchase 5 Oct 2 Sold goods to Outback Kian, 600 units at $80 each with invoice $4741. The invoice terms 6 were 5/10, net 30. Update the inventory table after each sale 7 Octs Paid 51100, with cheque #143 to Outdoor Muzl for an amount owing from last month 8 Oct 5 Bought inventory from Climb Foe with cheque 144,650 units at $29 per unit 9 Oct Returned 150 defective units to climb Foe and received cash 10 Octs Received $800, from Firewood Bill for sale on account last month 11 Oct 10 Outback Kian paid invoice #4741 on time and took advantage of the early payment discount 12 13 Prepared the payroll for October. Gross pay is $8000, cpp is $408. Elis 5150, and income 14 Oct 31 tax is $1600. The employer matches CPP contributions and pays 14 times the Eldeduction 15 Use the general Journal to record this. The cheque will be prepared later 16 Oct 31 interest 17 18 Required: 19 Record the transactions above in the general Journal and then post mounts to the General Ledger 20 Note Also remember to enter your posting references 21 22 23 Cose introduction Transactions General Journal General Ledger netary Valuation E M acer Case: Northern Reflections Northern Reflections as outdoor sporting equipment. You have been working for the company since its Inception a few years ago and have been promoted to be their accounting manager. They use the perpetual Inventory system and use the weigted average method to determine value for the inventory The opening balances for the month of September are as follows: Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13.000 Total Current Assets 56.2001 Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35.000 95.00 Total Assets $151,200 Account Liabilities Current Liabilities Accounts Payable $16,200 Current Portion of Bank Loan 6,000 Total Current Liabilities $22.200 Non-Current abilities Non-Current Portion of Bank Loan 18.000 Total Liabilities $40,200 Shareholders' Equity Common Shares 50,000 Retained Earnings 61.000 Total Shareholders' Equity 11.000 Total Liabilities & Equity $151,200 The bank loan has an annual interest rate of 5% and has monthly principal payment of $500 The inventory figure includes 500 units purchased at $26.00 each The Chart.cf Accounts (Gl no. His shown below Account Description Account Account Description ASSETS REVENUE Cash 101 Sales Revenue Petty Cash 105 Sales Discounts Accounts Receivable 110 Sales Returns and Allowances Merchandise Inventory 120 Interest Revenue Prepaid Insurance 125 EXPENSES Equipment 140 Cost of Goods Sold Accumulated Depreciation 185 Employee Benefits Expense LIABILITIES Depreciation Experte Accounts Payable 200 Insurance Expense interest Payable 205 Interest Expense CPP Pavable 220 Office Supplies Expense E Payable 225 Rent Espente Income Tax Payable 230 Salaries Eupene Salaries Payable 235 Bank Charges Expense Unearned Revenue 240 Maintenance Expense Bank loan 245 Entertainment Expense SHAREHOLDERS' EQUITY Common Shares 100 Retained Earning 305 400 405 410 420 500 510 515 520 525 530 535 540 545 550 555 Transactions for the month of October: Oct 1 Oct 2 Oct 5 Oct 5 Oct 7 Oct 8 Bought inventory from Outdoor Muzi on account, invoice #5455; 900 units at $28 each. Terms of the purchase were 4/10, net 30. Update the inventory table after each purchase. sold goods to Outback Kian, 600 units at $80 each with invoice #4741. The invoice terms were 5/10, net 30. Update the inventory table after each sale. Paid $1,100 with cheque #143 to Outdoor Muzi for an amount owing from last month. Bought inventory from Climb Foe with cheque #144, 650 units at $29 per unit. Returned 150 defective units to Climb Foe and received cash. Received $800 from Firewood Bill for a sale on account last month. Outback Kian paid invoice #4741 on time and took advantage of the early payment discount. Prepared the payroll for October, Gross pay is $8,000, CPP is $408, El is $150 and income tax is $1,600. The employer matches CPP contributions and pays 1.4 times the El deduction. Use the general journal to record this. The cheque will be prepared later. Made monthly bank loan payment of $600 which includes $500 principal and $100 interest Oct 10 Oct 31 Oct 31 Required: Record the transactions above in the general journal and then post amounts to the General Ledger. Note: Also remember to enter your posting references. Date Gelora Account Title and Explanation a General Journal Accountide and Caplanation Date 101 General Ledger Accounts Account: Cash Date Description Opening Balance PR DR CR GL NO: Balance (DR or CR) 27,200.00 DR Account: Date Petty Cash Description Opening Balance PR DR CR GL NO: 105 Balance (DR or CR) 0.00 OR Account: Date Accounts Receivable Description Opening Balance PR DR CR GL NO: 110 Balance (DR or CR) 16,000.00 DR Account: Date Merchandise Inventory Description PR Opening Balance DR CR GL No: 120 Balance (DR or CR) 13,000.00 DR Account: Date Prepaid Insurance Description Opening Balance PR DR CR GL No: 125 Balance (DR or CR) 0.00 DR 140 Account: Date Equipment Description Opening Balance PR DR CR GL No: Balance (DR or CR) 130,000.00 DR Account: Date Accumulated Depreciation Description PR Opening Balance DR CR GL No: 145 Balance (DR or CR) 35,000.00 CR Account: Date Accounts Payable Description Opening Balance PR DR CR GL No: 200 Balance (DR or CR) 16.200.00 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 Account: Date Salaries Payable Description Opening Balance PR DR CR GL No: 235 Balance (DR or CR) 000 CR Account: Date Unearned Revenue Description Opening Balance PR DR CR GL No: 240 Balance (DR or CR) 0.00 CR Account: Date Bank Loan Description Opening Balance PR DR CR GL NO: 245 Balance (DR or CR) 24,000.00 CR Account: Date Common Shares Description Opening Balance PR DR CR GL No: 300 Balance (DR or CR) 50,000.00 CR Account: Date Retained Earnings Description Opening Balance PR DR CR GL No: 305 Balance (DR or CR) 61,000.00 CR Account: Date Sales Revenue Description GL NO: 400 Balance (DR or CR) PR DR CR Account: Date Sales Discounts Description GL NO: 405 Balance (DR or CR) PR DR CR Account: Date Sales Returns and Allowances Description PR DR GL No: 410 Balance (DR or CR) CR Account: Interest Revenue Description GL No: 420 Balance (DR or CR) Date PR DR CR Account: GL. 500 Cost of Goods Sold Description PR DR OR Account 10 Date Employee Benefits Expense Description PR DR CH Balance GL.NO SIS Account: Date Depreciation Expense Description PR OR CR GEN Account Insurance Expense Date Description DR O Account: GUNCE 525 Interest Expense Description PR DR CH Account Data Office Supplies Expense Description PR DR Balance Account: Date Rent Expense Description GL Balance PR D CR Account: Date Description GL Ne Balance PR OR G Account Date Bank Charges Expense Description GEN BD OCH PR DR Account: Date Entertainment Expense Desertion FR GL M WS SO DA CR lt) Use this chart to keep track of transactions that involved inventory values Purchases Sales Date Quantity Unit Cost Value Quantity Unit Cost Value Balance Quantity Unit Cost 500 26.00 Value 13,000.00 Note: Don't forget to reduce the inventory account for the purchase return on Oct. 7 ii) Using the following information, prepare the bank reconciliation for October 31, 2020 Your staff accountant goes through the mail and opens the bank statement for the month of October provided by Fanshav Bank. It is shown below. Fanshawe Local Bank Prepared for Northern Reflections Date Information Withdrawal Deposit Balance Opening Balance 13,000.00 Oct 2 Deposit 14,200.00 27,200.00 Oct 5 Ch#143 1,100.00 26,100.00 Oct 8 Deposit 45,600.00 71,700.00 Oct 8 Deposit 4,350.000 76,050.00 Oct 11 Ch#8240 2,400.00 73,650.00 Oct 31 Service Charge 60.00 73,590.00 Oct 31 Interest 5.00 73,595.00 Cash 101 PR DR CR General Ledger Accounts Account: Date Description Opening Balance Oct 5 Ch#143 Oct 5 Cha#144 Oct 7 Return of inventory Oct 8 Deposit Oct 10 Deposit GJ3 GJ3 G3 G13 GJ3 GL No: Balance (DR or CR) 27,200.00 DR 1,100.00 26,100.00 DR 18,850.00 7,250.00 CR 11,600.00 CR 12,400.00 ICR 58,000.00 DR 4,350.00 800.00 45,600.00 Additional Information: a) The $14,200 is already recorded in the ledger last month. b) Cheque number of the company has only three (3) digits. Required: Prepare the October bank reconciliation for Northern Reflections using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record the relevant journal entries in the general journal and post the entries in the general ledger to bring the company's record up to date. NOTE: DON'T FORGET TO RECORD ANY JOURNAL ENTRIES RESULTING FROM THE BANK RECONCILIATION IN THE GENERAL JOURNAL AND POST TO THE RELEVANT LEDGER ACCOUNTS Northern Reflections Bank Reconciliation Statement October 31, 2020 Cash balance per bank statement: Cash balance per books: Add: Add: Deduct: Deduct: Adjusted Bank Balance Adjusted Bank Balance iv) Prepare the financial statements for the month ended October 31, 2020. Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13,000 Total Current Assets Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35.000 Total Assets 56,200 95.000 $151,200 $16,200 6.000 $22,200 Liabilities Current Liabilities Accounts Payable 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 Shareholders' Equity Total Liabilities & Equity 18.000 $40,2001 50,000 61.000 111.000 $151,200 1) Prepare a multistep income statement Northern Reflections Income Statement For the Month Ended October 31, 2020 2) Prepare a calculation of retained earnings Calculation of Retained Earnings For the Month Ended October 31, 2020 3) Prepare a classified balance sheet. Assume that $6,000 of the bank loan will be paid off in the next year. Northern Reflections Balance Sheet As at October 31, 2020 V) Based on the information above, answer the following questions a) Calculate the current ratio as at October 31, 2020 b) Does Northern Reflections have a good or bad current ratio? Explain why or why not. c) Calculate the inventory days on hand ratio as at October 31, 2020. (Since this is for the month, do not multiply by 365 in the formula. Instead multiply by 31 days) d) Last month, the inventory days on hand ratio was 37 days. Has the ratio improved? Why or why not? e) Calculate the debt to equity ratio as at October 31, 2020 Calculate the gross profit margin as at October 31, 2020 B) Last month, the gross profit margin percentage was 75%. What could have caused this decrease in gross margin percentage? hy Calculate the inventory turnover as at October 31, 2020. if inventory turnover last month was 0.837, is the company holding on to inventory for a longer or shorter period of time
