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5 Question 1 (16 points) Barley Inc. sells bags of malted barley to breweries in Southern Ontario. The company does not sell any other products and uses the perpetual method along with the first-in first-out method (FIFO) of inventory valuation. At January 1, 2022, the company had the following account balances Accounts receivable (all from Brewery A) Allowance for doubtful accounts $ 40,000 dr 3,500 cr 30,000 dr Inventory (600 bags of barley) During the three months ended March 31, 2022, Barley Inc. had the following transactions: Jan. 8 Purchased 300 bags of barley for $21,000 cash. Jan. 18 Sold 600 bags of barley to Brewery B for $60,000 on account with terms 2/10, net 30. Received full payment from Brewery B. Jan 27 Received payment from Brewery A of $37,500. Feb 14 Feb 16 Feb 24 Wrote of the remaining amount from Brewery A. Purchased 400 bags of barley for $30,000 cash. Feb 25 Sold 400 bags of barley to Brewery C for $40,000 on account with terms 2/10, net 30. Mar 5 Sold 200 bags of barley to Brewery D for $20,000 on accounts with terms 2/10, net 30. Barley Inc. estimates that 5% of any overdue accounts and 1% of any undue accounts will not be collected. Required 1. Provide journal entries to record the above transactions and any necessary quarter end adjusting entries. 2. Prepare a statement of earnings up to gross profit/margin for the three months ended March 31, 2022