Problem 3(13.5marks)(25 minutes)

Flowers Inc. has provided you with the following information about its transactions in February 2021:

1)Acquired new inventory on credit: $45,000.

2)Took out a 2-year loan for $200,000 on February 1. Annual interest is 5%, payable at the loan maturity date (February 1st, 2023).

3)Prepaid on February 1stthe rent of February, March and April 2021: $4,000 per month.

4)Invested excess cash in shares of company CCC: 3,000 shares for $11 per share. The investment is classified as Fair Value Through Profit and Loss (FVTPL)

5)Received $16,000 cash in advance from a customer.

6)Based on a physical inventory count, it determined that the inventory left at the end of February amounts to $29,000. Inventory at the beginning of February was $35,000.

7)At the end of February, the shares of company CCC were trading at $13 per share.

8)Delivered 60% of the merchandise due to the customer in transaction 5.

9)The last pay in February is on Tuesday the 23rdfor the 2 weeks ending on and including that day. It amounted to $20,000. Flowers Inc.'s employees do not work the weekends. February has 28 days.

Required-

Prepare all the journal and adjusting entries required at the end of February 2021, assuming Flowers Inc. prepares monthly financial statements.