Question $1$

The following Statement of Financial Position accounts are reported for Bees Knees Ltd at Decembe $20$X$1.$ This company's business model is to create novelty products from honey and resell them at a profit through small retailers and farm shops. All balances are in Canadian dollars $($$$)$

$\backslash$table$[[$Account$,$Balance $($DR$),$Balance $($CR$)],[$Petty cash,$400,],[$Cash in bank,$26,600,],[$A$/$R$,23,000,],[$Inventory $($products for sale$),60,000,],[$Honey and supplies inventory,$45,000,],[$Prepaid rent,$15,000,],[$Equipment$,55,000,],[$Accumulated depreciation $-$ Equip.,,$20,000],[$Debt$,,100,000],[$Common shares,,$50,000],[$Retained earnings,,$55,000]]$

January $1$: BK ordered and received $$10,000$ of honey, paid for in cash

January $5$: BK purchases canning supplies for $$1,200$ on account

January $7$: BK reimburses an employee for fuel costs paid of $$65$ and office expenses of $$120($total amount reimbursed $=$$$185$ from petty cash$)$

January $12$: BK purchases a canning machine for $$12,000$ and pays with cheque #$55$

January $13$: BK sells $$25,000$ of product inventory for $$40,000$ on account

January $14$: BK raises financing by issuing shares in the amount of $$25,000$ received by cheque

January $15$: BK collects employee timecards. Total amount owing to employees is $$35,000$

January $16$: BK collects $$5,000$ from customers for payment on account

January $19$: BK pays employees by direct deposit for amounts owing $($see Jan $15)$

January $22$: BK receives an invoice for billboard advertising in the amount of $$700$

January $24$: BK pays the invoice for billboard advertising $($see Jan $22)$

January $28$: BK receives a custom product order and a deposit from the customer for $$15,000$

January $30$: BK pays $$2,000$ on debt owing $($ $$1,400$ for principal and $$600$ for interest$)$

January $30$: BK 'tops up$\text{'}$ petty cash to $$400$ by withdrawing cash from the bank account

January $31$: BK has used up one month's rent. Two months rent now remain.

Required:

Post the above balances to T$-$accounts $($see T$-$account template on URCourses$)$

Post the transactions to your T$-$accounts

Total your T$-$accounts and create a Statement of Financial Position from your ending balances. BK has yet to determine the current portion of long$-$term debt, so classify the entire amount a non$-$current.

Comment on Bees Knees' liquidity and solvency using ratio analysis.

Question $2$

Journalize the following February transactions using debits and credit rather than T$-$accounts:

February $1$: BK uses $$8,000$ of honey and $$2,000$ in supplies to complete the custom order placed Jan $2$

February $5$: BK delivers the custom product order placed January $28$ and bills the customer is $$25,000($i$.$e$.,$ the total amount still owing is $$10,000,$ and the inventory cost is $10,000.$

February $10$: BK collects $$10,000$ on account for the custom order.

February $15$: BK collects employee timecards. Total amount owing to employees is $$38,000.$

February $20$: BK pays employees by direct deposit for salaries owing $($see Feb $15).$