Scenario Mr. Jean-Marc Desjardins and his wife Nora opened a trendy clothing store in downtown Montreal to sell women's vintage dress collections. Their new store opened its doors to the public on July 6, 2018. Nora was hired as a full-time sales consultant/stylist right away. They called their store "Boutique Avant-Garde." The Desjardins approached you and asked you to do the accounting for their business for the first six months of operation, after which they will hire a full-time accountant to carry on the accounting duties. Transactions Here are the transactions that took place from the inception of the business through the next six months: Date of Transaction July 1, 2018 July 3, 2018 July 5, 2018 July 5, 2018 Description Mr. Desjardins invested $225,000 into his business. The Desjardins received the racks and shelves they ordered. The invoice was dated June 30, 2018 for $12,000-to be paid in a month. The Desjardins bought a MacBook Air for business use ($2,800). They also bought an Apple Watch-Silver Aluminum Case with Seashell Sport Loop ($1,450), which Nora wore at all times while working in the Boutique Avant-Garde. Both purchases were charged to the company's American Express corporate credit card. The July AMEX statement was received on July 15, and was due on the 5th day of the month following the month of the statement. The Desjardins bought a cash register system and computer server for a total cost of $25,000. They made a down payment of $7,500 in cash, with the balance owing to be paid interest-free and in three (3) postdated cheques. The first two cheques were for the same amount as the down payment and the third cheque was for the residual outstanding balance. The dates on the cheques were: July 2018 December 2018 August 21, 2018 July 6-September 30, 2018 November 30, 2018 October 1-December 31, 2018 July 2018- December 2018 0 0 Number 001 dated Aug 5, 2018 Number 002 dated Sept 5, 2018 Number 003 dated Oct 5, 2018 Nora Desjardins was paid a semi-monthly gross salary of $2,000 as of July 2018. She was paid on the 15th and at the end of each month, with her December 31 salary paid in early January 2019. Mr. Desjardins needed funds and withdrew $33,000 from the company. Over their first quarter, the Desjardins reported $23,000 of cash sales and $48,000 of credit card sales. The credit card company (VISA) charges them a 4% fee and paid them a week from their reporting day of Sept 30, 2018. Mr. Desjardins signed a 15-year mortgage to purchase a warehouse in downtown Montreal. The mortgage was for $600,000, which was deposited in the company's bank account where it will remain until the purchase negotiations are over. The mortgage has a 3.5% fixed annual interest rate and payment terms requiring monthly payments starting on December 31, 2018. Over their second quarter, the Desjardins reported $75,000 of cash sales and $120,000 of credit card sales. They reported their second quarter credit sales information to the credit card company (VISA) in early January 2019 for processing thereafter. The Desjardins paid a monthly rent of $6,000 for their store. Rent is due at the beginning of each month. July 2018 December 2018 The Desjardins paid combined monthly utility bills totalling $2,200 each month. The utilities are due at the end of each month with the exception of the December bill, which is due in early January 2019. Instructions Exercise 1 1. You need to record each of the transactions that took place from the founding of Boutique Avant-Garde through December 31, 2018, in a ledger. The ledger must use the dual entry system of accounting you learned about and practised throughout the first two modules of the course. 2. For the ledger, create a document in Microsoft Word (or equivalent). Arrange the entries by date and provide the double entry notation for each transaction in turn. Exercise 2 3. On a separate page, describe in 300-350 words some of the most important and applicable aspects of the business and ownership structures that Mr. and Mrs. Desjardins should consider for Boutique Avant-Garde. Provide enough explanation to give the Desjardins a full overview of the explained concepts. L