SECTION C - LONG QUESTION (35 marks) Your company Orange Fruits Limited (OFL) sells exotic imported fruit. On 31 December 2013, OFL's balance sheet showed the following amounts: Orange Fruits Limited Balance Sheet Month ending 31 December 2013 LIABILITIES & OWNERS' EQUITY Accounts Payable 2,196 Unearned Revenues 2,000 ASSETS Cash Accounts Receivables Allowance for bad debts Inventories Supplies Notes Receivable Total Assets 22,500 12,000 (1,343) 9,861 4,428 10,000 57,446 Share Capital Retained Earnings Total Liability & Equity 50,000 3,250 57,446 REQUIREMENT 1: Journalize the following transactions, all occurring during 2014: January 1: Pay S6,000 cash for 6 months of rent, beginning on 1 January 2014 January 8: Purchase $5,220 inventories (fruit) paying an additional $550 for delivery cost - FOB shipping point, all paid in cash. January 12: Sell S6,200 inventories (fruit) to customers, including $2,000 customers have already paid in December 2013 (check the balance sheet on Dec 31, 2013). The remaining purchases are on account. This fruit cost OFL $2,900. OFL also incurs delivery expense of $100 on account - FOB destination. January 13: Purchase $500 of supplies in exchange for $500 of inventory (Hint: It's a non-monetary exchange, only affects two accounts: supplies and inventory) January 18: Collect $4,700 cash to settle accounts receivables. Also write off $500 accounts receivables. January 25: Pay $1,200 to settle accounts payables. January 31: Pay salary expense for the month of $4,000 in cash. January 31: A physical count reveals that there are $3,800 supplies on hand. Interest on the note receivable is 1.5% per month. An aging-of-receivables analysis reveals that the amount of allowance for bad debts should be $1,300. Record the adjusting entries needed for these transactions. (Hint: Use T-account analysis for each account. Check the beginning balance from the Balance Sheet on Dec 31, 2013. Don't forget to consider the previous transactions into account, such as rent, supplies and accounts receivables) January 31: Record any closing entries required for the month ending 31 January 2014. Ignore taxes when computing Retained Earnings. Assume no dividend is announced REQUIREMENT 2: Fill in the balance sheet for the month ending 31 January 2014 Orange Fruits Limited Balance Sheet Month ending 31 January 2014 TTDTT TITANDO DA Balance Sheet Month ending 31 January 2014 ASSETS LIABILITIES & OWNERS' EQUITY Cash Accounts Payable Accounts Receivables Unearned Revenues Allowance for bad debts Inventories Supplies Share Capital Notes Receivable Retained Earnings Interest Receivable Prepaid Rent TOTAL ASSETS TOTAL LIAB & EQUITY