You are the bookkeeper of The Corner Dress Shop and have gathered the follow- ing information. It is your task to complete the accounting cycle for March 2022. THE CORNER DRESS SHOP TRIAL BALANCE FEBRUARY 28, 2022 Account Titles and Description Cash Dr. Cr. 30 77531 Petty Cash Accounts Receivable Office Supplies Prepaid Rent Prepaid Insurance GST Prepaid Inventory 50,00 829185 62430 180000 100000 436 34 830900 Computer and Office Equipment 500000 Acc. Dep'n-Computer & Office Equipment 261 12 Computer Software 739 00 Acc. Dep'n-Computer Software 6158 Delivery Truck 12 000 00 Acc. Dep'n-Delivery Truck Accounts Payable Income Taxes Payable El Payable CPP Payable Medical Plan Payable Charitable Donations Payable GST Collected Rent Received in Advance Betty Loeb, Capital Betty Locb, Withdrawals Sales Cost of Goods Sold 7300 00 340 00 478899 1108 82 40879 810 30 11200 18000 2313 65 600 00 48 078 80 59 865 05 Wages Expense CPP Expense El Expense Insurance Expense Rent Expense Dep'n Expense Computer & Office Equipment Dep'n Expense-Software Dep'n Expense-Delivery Truck Accounting Expense 19 073 38 18 120 00 81030 47692 20000 180000 26112 6158 34000 1460 00 118 929 10 118 929 10 Balances in subsidiary ledgers as of February 28: Accounts Receivable* Accounts Payable* Ronald Co. $5,538.00 Blew Co. $2,543.77 Sally's Store 2,753.85 Dresses by Shelley 1,510.22 Silk Magic 735.00 *Includes 5% GST. Payroll is paid monthly, and employee claim codes are unchanged. The payroll register for January and February is provided on pages 582-583. In March, salaries are as follows (all deductions are the same unless indicated): Mel Case Jane Holl $1,860 Assume all income taxes are calculated as 20% of gross wages. 2,900 For CPP and El assume 0.0495 and 0.0188, respec- tively. (Remember to include the calculation for CPP exemption of $3,500 per year.) Jackie Moore 4,300 Required a. Set up a general ledger, accounts receivable ledger, accounts payable ledger, aux- iliary petty cash record, and payroll register. (Before beginning, be sure to update the ledger accounts on the basis of information given in the trial balance for February 28.) b. Journalize all transactions during March, using the special journals discussed in the text. Assume this company uses the perpetual inventory method. The practice set can be completed using either method of accounting for inventory. If no specific method is indicated by your instructor, use the perpetual method. Assume the cost of all inventory is 75% of its selling price. c. Prepare the payroll register for March. d. Update the accounts payable and accounts receivable subsidiary ledgers for March. e. Post to the general ledger. f. Prepare a trial balance on a worksheet and complete the worksheet as of March 31, 2022. g. Prepare an income statement, statement of owner's equity, and classified balance sheet. h. Journalize the adjusting and closing entries. i. Post the adjusting and closing entries to the ledger. j. Prepare a post-closing trial balance. The chart of accounts for The Corner Dress Shop is provided on the next page. Assets 1110 Cash 1115 Petty Cash 1120 Accounts Receivable 1135 Office Supplies 1140 Prepaid Rent Chart of Accounts Liabilities 2100 Accounts Payable 2200 Accrued Wages 2330 Income Taxes Payable 2335 El Payable 2340 CPP Payable 2350 Medical Plan Payable 2360 Charitable Donations Payable 1145 Prepaid Insurance 1150 HST Prepaid 1210 Inventory 2400 HST Collected 1330 Computer and Office Equipment 2500 Rent Received in Advance 1335 Acc. Dep'n-Computer & Office Equipment 1340 Computer Software 1345 Acc. Dep'n-Computer Software 1350 Delivery Truck 1355 Acc. Dep'n.-Delivery Truck Owner's Equity 3110 Betty Loeb, Capital 3120 Betty Loeb, Withdrawals Cost of Goods Sold 5040 Cost of Goods Sold Revenue 4110 Sales 4140 Sales Discounts 4150 Sales Returns & Allowances Expenses 5400 Wages Expense 5430 El Expense 5440 CPP Expense 5500 Postage Expense 5510 Insurance Expense 5520 Cleaning Expense 5530 Rent Expense 5540 Delivery Expense 5550 Dep'n. Expense-Computer and Office Equipment 5560 Dep'n. Expense-Software 5570 Dep'n. Expense-Delivery Truck 5590 Accounting Expense 5595 Miscellaneous Expense Transactions 2022 Mar. 1 Paid rent cheque No. 121 to Smithstone Realty, $900.00 + HST of 13%. Purchased merchandise from Jones Company, invoice No. JC 59087: @ $10 each + HST CT-01 50 CY-01 50 @ $10 each + HST Paid $6 from petty cash fund for doughnuts, voucher No. 01 (miscellaneous expense, NO HST). Sold merchandise on account to Morris Company, invoice No, CD 1081 (cost of goods sold is calculated as 75% of sales before GST): PO-01 5 @$39.99 each + HST PO-02 5 @$39.99 each + HST SIC-01 6 @$89 each + HST 5 Paid Dresses by Shelley $1,510.22 (invoice No. DS 12895), cheque No. 122. PAYROLL JOURNAL-JANUARY Federal Provincial Gross Cumulative Employee Claim Claim Earnings CPP IT-Fed IT-Prov IT-Total Mel Case 4 4 186000 44 27 000 44 27 Jane Holl 1 290000 255 52 12503 38055 Jackie Moore 3 3 430000 45984 22416 68400 110882 906000 JANUARY (continued) CPP Deductions Net Cheque EI Health Charitable Pay No 77 63 3497 28 00 2000 1655 13 12911 5452 42 00 3000 2263 82 19841 8084 42 00 4000 325475 405 15 17033 112 00 9000 717370 PAYROLL JOURNAL-FEBRUARY Federal Provincial Employee Claim Claim Earnings Gross Cumulative CPP IT-Fed IT-Prov Mel Case 4 4 186000 4427 000 Jane Holl 1 1 2900 00 25552 12503 IT-Total 4427 38055 Jackie Moore 3 3 430000 45984 22416 68400 110882 906000 FEBRUARY (continued) Deductions Net Cheque CPP Health Charitable 7763 34 97 2800 2000 Pay 165513 Na 12911 5452 42 00 30 00 226382 19841 8084 4200 4000 325475 40515 17033 11200 9000 717370 Mar. 5 11 7 Received payment from Ronald Company, $5,538.00 (invoice No. CD 1078). Paid $12.60 (including GST) from petty cash fund for postage, voucher No. 02. Paid Blew Company $2,543.77, cheque No. 123 (invoice No. BC 1795). Received payment from Sally's Store (invoice No. CD 1076), $2,753.85. Paid $5 for delivery expense from petty cash fund, voucher No. 03. Received amount due from Morris Company, less 2% discount. Purchased from Dresses by Shelley, invoice No. DS 12947: @ $19 each + HST Paid cleaning service $300 + HST, cheque No. 124 (cheque was issued to Cleaners Inc.). 12 12 CD-01 75 CD-02 75 @$19 each + HST 12 13 DI-01 20 @$48 each + HST DS-01 20 @$80 each + HST PO-01 75 @$12.50 each + HST PO-02 75 @$12.50 each + HST 15 Purchased from Blew Company, invoice No, BC 1896: 15 Sold to Bing Company, invoice No. CD 1082 (cost of goods sold is calculated as 75% of sales): SD-01 5 @$29.99 each + HST Paid CRA for income tax, CPP, and El for February, cheque No. 125. (Note: Record as a compound entry in the cash payments journal.) 15 18 Mar. 15 Paid CRA for HST due (net) end of February, cheque No. 126.* Paid the Government of Ontario for medical premiums due for the month of February, cheque No. 127. Cash sales, summarized on invoice No. CD 1083 (cost of goods sold is calculated at 75% of sales): CD-01 30 @ $59.95 each + HST CD-02 45 @$59.95 each + HST CT-01 15 @$30 each + HST CY-01 21 @ $30 each + HST DI-01 10 @$150 each + HST DS-01 6 @$250 each + HST SIC-01 4 @ $89 each + HST WD-01 5 @ $750 each + HST 18 19 19 20 Paid Jones Company amount owed (invoice No. JC 59087), cheque No. 128. Bing Company received an allowance for its purchase on invoice No. CD 1082. Credit memo No. 001 was issued. No inventory was returned. Paid Dresses by Shelley amount due, less 2% discount (invoice No. DS 12947), cheque No. 129. Betty Loeb withdrew $1,000 for her personal use, cheque No. 130. Sold to Sally's Store, invoice No. CD 1084: 10 @ $59.95 each + HST 21 DI-01 10 @ $150 each + HST CD-01 26 CD-01 CD-02 28 23 29 30 Additional Data Purchased from Dresses by Shelley, invoice No. DS 13062: 50 @ $19 each +HST 50 @ $19 each + HST Paid $10 from the petty cash fund for first aid emergency, voucher No. 04. Recorded and paid employees, cheques No. 131, No. 132, and No. 133 (cash payments journal). Issued cheque to Jane Holl for replenishment of petty cash fund, cheque No. 134 (compound entry in cash payments journal). a. Physical count of merchandise inventory is $6,500. b. Rental income earned, $300 (one month's rent from subletting; received in advance in February). c. Depreciation (straight-line): Delivery truck Computer Residual value = $1,800, expected life of 5 years Residual value = $ 300, expected life of 3 years Residual value = $ 0, expected life of 2 years Computer Software d. One month of insurance has expired.