v) Based on the information above, answer the following questions.

a) Calculate the current ratio as at October 31, 2020

b) Does Norther Reflections have a good or bad current ratio? Explain why or why not.

c) Calculate the inventory days on hand ratio as at October 31, 2020. (Since this is for the month, do not multiply by 365 in the formula. Instead multiply by 31 days.)

d) Last month, the inventory days on hand ratio was 37 days. Has the ratio improved? Why or why not?

e) Calculate the debt to equity ratio as at October 31, 2020.

f) Calculate the gross profit margin as at October 31, 2020.

g) Last month, the gross profit margin percentage was 75%. What could have caused this decrease in gross margin percentage?

h) Calculate the inventory turnover as at October 31, 2020.

i) If inventory turnover last month was 0.837, is the company holding on to inventory for a longer or shorter period of time?

_m_____ mm mum-_- ____lil- ____E- ___ 1250-00 11,500.00 121400-00 58:000-00 Additional Information: a) The $14,200 deposit in the Bank Statement on Oct. 2 was already recorded in the ledger last month. b) Cheque number of the company has only three (3) digits. Required: Prepare the October bank reconciliation for Northern Reections using the bank statement and general ledger provided. Compare the information in the general ledger to the bank statement. Once reconciled, record the relevant journal entries in the general journal and post the entries in the general ledger to bring the company's record up to date. R NOTE: DON'T FORGET TO RECORD ANY JOURNAL ENTRIES RESULTING FROM THE BANK RECONCILIATION IN THE GENERAL JOURNAL AND POST TO THE RELEVANT LEDGER ACCOUNTS Northern Reflections Bank Reconciliation Statement October 31, 2020 Cash balance per bank statement: Cash balance per books: Add: Add: Deduct: Deduct: Adjusted Bank Balance Adjusted Book Balanceiv) Prepare the financial statements for the month ended October 31, 2020. Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13,000 Total Current Assets 56,200 Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35,000 95,000 Total Assets $151,200 Liabilities Current Liabilities Accounts Payable $16,200 Current Portion of Bank Loan 6,000 Total Current Liabilities $22,200 Non-Current Liabilities Non-Current Portion of Bank Loan 18,000 Total Liabilities $40,200 Shareholders' Equity Common Shares 50,000 Retained Earnings 61,000 Total Shareholders' Equity 111,000 Total Liabilities & Equity $151,2001) Prepare a multistep income statement. Sample statement on page 210 in your text. Northern Reflections Income Statement For the Month Ended October 31, 20202) Prepare a calculation of retained earnings Calculation of Retained Earnings For the Month Ended October 31, 2020 Retained Earnings, October 1, 2020 Add: Net Income Retained Earnings, October 31, 2020 3) Prepare a classified balance sheet. Assume that $6,000 of the bank loan will be paid off in the next year. Sample statement on page 167 in your text. Northern Reflections except replace Capital with Retained Earnings as Balance Sheet calculated above and Common Shares. As at October 31, 2020Case: Northern Reflections Northern Reflections sells outdoor sporting equipment. You have been working for the company since its inception a few years ago and have been promoted to be their accounting manager. They use the perpetual inventory system and use the weigted average method to determine value for the inventory. The opening balances for the month of September are as follows: Northern Reflections Balance Sheet As at September 30, 2020 Assets Current Assets Cash $27,200 Accounts Receivable 16,000 Merchandise Inventory 13,000 Total Current Assets 56,200 Proptery, Plant & Equipment Equipment 130,000 Accumulated Depreciation -35,000 95,000 Total Assets $151,200 Liabilities Current Liabilities Accounts Payable $16,200 Current Portion of Bank Loan 6,000 Total Current Liabilities $22,200 Non-Current Liabilities Non-Current Portion of Bank Loan 18,000 Total Liabilities $40,200 Shareholders' Equity Common Shares 50,000 Retained Earnings 61,000 Total Shareholders' Equity 111,000 Total Liabilities & Equity $151,200The bank loan has an annual interest rate of 5% and has monthly principal payment of $500. The inventory figure includes 500 units purchased at $26.00 each. The Chart of Accounts (GL no.) is shown below: Account Description Account # Account Description Account # ASSETS REVENUE Cash 101 Sales Revenue 400 Petty Cash 105 Sales Discounts 405 Accounts Receivable 110 Sales Returns and Allowances 410 Merchandise Inventory 120 Interest Revenue 420 Prepaid Insurance 125 EXPENSES Equipment 140 Cost of Goods Sold 500 Accumulated Depreciation 145 Employee Benefits Expense 510 LIABILITIES Depreciation Expense 515 Accounts Payable 200 Insurance Expense 520 Interest Payable 205 Interest Expense 525 CPP Payable 220 Office Supplies Expense 530 El Payable 225 Rent Expense 535 Income Tax Payable 230 Salaries Expense 540 Salaries Payable 235 Bank Charges Expense 545 Unearned Revenue 240 Maintenance Expense 550 Bank Loan 245 Entertainment Expense 555 SHAREHOLDERS' EQUITY Common Shares 300 Retained Earnings 305Transactions for the month of October: Bought inventory from Outdoor Muzi on account, invoice #5455,- 900 units at $28 each. Terms of the purchase were 4/10, net 30. Update the inventory table after each purchase. Sold goods to Outback Kian, 600 units at $80 each with invoice #4741. The invoice terms were 5/10, net 30. Update the inventory table after each sale. (:1th Oct 5 Paid $1,100 with cheque #143 to Outdoor Muzi for an amount owing from last month. Bought inventory from Climb Foe with cheque #144, 650 units at $29 per unit. Oct 7 Returned 150 defective units to Climb Foe and received cash. Received $800 from Firewood Bill for a sale on account last month. Outback Kian paid invoice #4741 on time and took advantage of the early payment discount. Prepared the payroll for October. Gross pay is $8,000, CPP is $408, El is $150 and income tax is $1,500. The employer matches CPP contributions and pays 1.4 times the El deduction. Use the general joumal to record this. The cheque will be prepared later. Made monthly bank loan payment of $600 which includes $500 principal and $100 interest. iii) Using the following information, prepare the bank reconciliation for October 31, 2020 Your staff accountant goes through the mail and opens the bank statement for the month of October provided by Fanshawe Local Bank. It is shown below. Prepared for Northern Reflections Date Information Withdrawal Deposit Balance Opening Balance 13,000.00 Oct 2 Deposit 14,200.00 27,200.00 Oct 5 Chq#143 1,100.00 26,100.00 Oct 8 Deposit 45,600.00 71,700.00 Oct 8 Deposit 4,350.00 76,050.00 Oct 11 Chq#8240 2,400.00 73,650.00 Oct 31 Service Charge 60.00 73,590.00 Oct 31 Interest 5.00 73,595.00 General Ledger Accounts Account: Cash GL No: 101 Date Description PR DR CR Balance (DR or CR) Opening Balance 27,200.00 DR Oct 5 Chq#143 GJ3 1,100.00 26,100.00 DR Oct 5 Chq#144 GJ3 18,850.00 7,250.00 CR Oct 7 Return of inventory GJ3 4,350.00 11,600.00 CR Oct 8 Deposit GJ3 00.00 12,400.00 CR Oct 10 Deposit GJ3 45,600.00 58,000