The following are selected transactions of Ayayai Department Store Ltd. for the current year ended December 31. Ayayai is a private company operating in the province of Manitoba where PST is 8% and GST is 5%. PDSL follows ASPE and has a periodic inventory system. 1. On February 2, Ayayai placed an order to buy goods for resale from Hashmani Limited for $ 43,000 plus GST. Terms of purchase are f.o.b. destination, net 15. The goods arrived February 6 and the invoice was paid on February 20. (Hint: Inventory for resale is purchased PST exempt.) 2. On April 1, Ayayai purchased a truck for $ 43,000 from Schuler Motors Limited, paying $ 9,890 cash and signing a one-year, 8% note for the balance of the purchase price. Provincial sales tax of 8% and GST of 5% were charged by the supplier on the purchase price. 3. On May 1, Ayayai borrowed $ 78,000 from First Provincial Bank by signing a $87,000 non-interest-bearing note due one year from May 1. 4. On June 30 and December 31, Ayayai remitted cheques for $ 19,700 each as instalments on its current year tax liability. 5. On August 14, Ayayai's board of directors declared a $ 31,000 cash dividend that was payable on September 10 to shareholders of record on August 31. 6. On December 5, Ayayai received $ 1,300 from Jefferson Ltd. as a deposit on a trailer that Jefferson is using for an office move. The deposit is to be returned to Jefferson after it returns the trailer in good condition on January 15. (Hint: Use the account Refund Liability.) 7. On December 10, Ayayai purchased new furniture and fixtures for $ 13,000 on account. Provincial sales tax of 8% and GST of 5% were charged by the supplier on the purchase price. 8. During December, cash sales of $ 90,000 were recorded, plus 8% provincial sales tax and 5% GST that must be remitted by the 15th day of the following month. Both taxes are levied on the sale amount to the customer. Ignore any cost of goods sold. 9. Ayayai's lease for its store premises calls for a $3,400 monthly rental payment plus 3% of net sales. The payment is due one week after month end. 10. Ayayai was advised during the month of December that it is legally required to restore the area (considered a land improvement) surrounding one of its new store parking lots, when the store is closed in 12 years. Ayayai estimates that the fair value of this obligation at December 31 is $ 90,000. 11. The corporate tax return indicated taxable income of $ 205,700. Ayayai's income tax rate is 20%. Part 1 Your answer is partially correct. Prepare all the journal entries necessary to record the above transactions when they occurred and any adjusting journal entries relative to the transactions that would be required to present financial statements at December 31 in accordance with GAAP. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Feb. 6 Purchases 43,000 GST Receivable 2,150 Accounts Payable 45,150 Feb. 20 Accounts Payable 45,150 Cash 45,150 Apr. 1 Vehicles 46,440 GST Receivable 2,150 Notes Payable 38,700 Cash 9,890 May 1 Cash 78,000 Notes Payable 78,000 June 30 Income Tax Expense 19,700 Cash 19,700 Aug. 14 Retained Earnings 31,000 Dividends Payable 31,000 Sept. 10 Dividends Payable 31,000 Cash 31,000 Dec. 5 Cash 1,300 Refund Liability 1,300 Dec. 10 Furniture 14,040 GST Receivable 650 Accounts Payable 14,690 Dec. 10 Furniture 14,040 GST Receivable 650 Accounts Payable 14,690 Dec. 31 Cash 101,700 GST Payable 4500 Sales Tax Payable 7200 Sales Revenue 90,000 (To record cash sales) Dec. 31 Rent Expense 6,100 Rent Payable 6,100 (To accrue rent expense) Dec. 31 Land Improvements 90,000 Asset Retirement Obligation 90,000 10 10 10 10 DE D! l0000. IN DI JI JI JIJI DIO (To record asset retirement obligation) Dec. 31 Income Tax Expense 41,140 Income Tax Payable 41,140 (To record payment of income tax expense) Dec. 31 V Income Tax Expense 19,700 Cash 19,700 (To accrue income tax expense) Dec. 31 Interest Expense 2580 Notes Payable 2580 (To accrue interest expense) Dec. 31 No Entry No Entry 0 (To accrue expense on non-interest- bearing note) e Textbook and Media Save for Later Last saved 1 second ago. Attempts: 1 of 2 used Submit Answer Saved work will be auto-submitted on the due date. Auto