This problem continues the Splashed Canoe Company situation from CTA2. At the beginning of the new year, Splashed Canoe Company decided to carry and sell T-shirts with its logo printed on them. Splashed Canoe Company uses the perpetual inventory system to account for the inventory. During January 2025, Splashed Canoe Company completed the following merchandising transactions:Jan. 1Purchased 15 T-shirts at $4 each and paid cash.2Sold 8 T-shirts for $10 each, total cost of $32. Received cash.2Collected $4,500 on account.3Purchased 50 T-shirts on account at $6 each. Terms 2/10, n/30.7Paid the supplier for the T-shirts purchased on January 3, less discount.8Realized 4 T-shirts from the January 1 order were printed wrong and returned them for a cash refund.10Sold 40 T-shirts on account for $10 each, total cost of $200. Terms 3/15, n/45.12Received payment for the T-shirts sold on account on January 10, less discount.14Purchased 120 T-shirts on account at $5 each. Terms 4/15, n/30.15Paid the utilities and phone bills from December15Paid the wages accrued in December.18Splashed Company called the supplier from the January 14 purchase and told them that some of the T-shirts were the wrong color. The supplier offered a $50 purchase allowance.18Rented Canoes and received cash, $1,42520Paid the supplier for the T-shirts purchased on January 14, less the allowance and discount.20Received bills for utilities ($360) and telephone ($275) which will be paid later.21Sold 60 T-shirts on account for $10 each, total cost of $220. Terms 2/20, n/30.23Received a payment on account for the T-shirts sold on January 21, less discount.23Paid various accounts payable, $1,800.25Purchased 320 T-shirts on account at $5 each. Terms 2/10, n/30, FOB shipping point.27Paid freight associated with the January 25 purchase, $48.29Paid for the January 25 purchase, less discount.30Sold 275 T-shirts on account for $10 each, total cost of $1,300. Terms 2/10, n/30.30Paid employee, $750.Month end adjusting entries:31A physical count of the inventory at the end of the month revealed the cost was $670.31The company estimated sales returns will be $35 with a cost of $15.31Office supplies used, $55.31The Unearned Revenue has now been earned.31Interest expense accrued on the notes payable, $50.31One month of rent is used (see previous CTA for origional 3 month rent payment).31Recorded depreciation on the building & canoes (refer to CTA2)RequirementsREQ1Open the following T-accounts in the ledger, using the post-closing balances from CTA2: Cash, Accounts Receivable, Merchandise Inventory, Estimated Returns Inventory, Office Supplies, Prepaid Rent, Land, Building, Accumulated Depreciation––Building, Canoes, Accumulated Depreciation––Canoes, Accounts Payable, Utilities Payable, Telephone Payable, Wages Payable, Refunds Payable, Interest Payable, Unearned Revenue, Notes Payable, Common Stock, Retained Earnings, Income Summary, Sales Revenue, Canoe Rental Revenue, Cost of Goods Sold, Rent Expense, Wages Expense, Utilities Expense, Telephone Expense, Supplies Expense, Depreciation Expense––Building, Depreciation Expense––Canoes, Interest Expense.REQ2Journalize and post the transactions. Compute each account balance, and denote the balance as Balance. Omit explanations.REQ3Prepare the month ended January 31, 2025, single step income statement of Splashed Canoe Company.REQ4Journalize and post the closing entries. Omit explanations. Denote each closing amount as Clo. and each balance as Balance. After posting all closing entries, prove the equality of debits and credits in the ledger by preparing a post-closing trial balance.REQ5Compute the gross profit percentage for January for Splashed Canoe Company.