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a) Prepare the journal entries for the following transactions for the month of February. You will also need to update the inventory in the table for each purchase and sale, return or allowance, found under the Inventory

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Case: Tees R Us - Solutions Tees R Us , set up as a privately held corporation, operating as a t-shirt retailer, of which 100% of the Common Shares are owned by Tamara Green. You were hired to account for transactions for the month of February 2021, complete month endprocessing, prepare the financial statements and perform a financial ratio analysis as of the end of that month. They use perpetual inventory system and use the weigted average method to determine value for the inventory. Its balance sheet as at January 31, 2021, is presented below. Tees R Us Classified Balance Sheet As at January 31 , 2021 Assets Cash $35,600 Accounts Receivable 16,870 Merchandise Inventory 12,500 Prepaid Insurance 4.400 Total Current Assets 69,370 Long-Term Assets Equipment 162,000 Accumulated Depreciation -52,000 110,000 Total Assets $179,370 Liabilities Current Liabilities Accounts Payable $12,000 Unearned Revenue $9,000 Salaries Payable $5,700 Current Portion of Bank Loan 11 160 Total Current Liabilities $37,860 Non-Current Liabilities Non-Current Portion of Bank Loan 23.840 Total Liabilities $61,700 Shareholders' Equity Common Shares 81,000 Retained Earnings 36.670 Total Shareholders' Equity 117,670 Total Liabilities & Equity $179,370 Notes Relating to Balances: Customers and balances Suppliers and Balances Columbia $3,200 Henley SO Arrow $6,400 Als $7,500 Dickies $4,250 Fabrica $4,500 Martin $2,100 Total $12,000 Short $920 Total $16,870 The bank loan has an annual interest rate of 5% and has monthly principal payment of $930. The inventory figure includes 500 units purchased at $25.00 each.

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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 Other Income 430 Equipment 140 EXPENSES Accumulated Depreciation 145 Cost of Goods Sold 500 LIABILITIES Employee Benefits Expense 510 Accounts Payable 200 Depreciation Expense 515 Interest Payable 205 Insurance Expense 520 CPP Payable 220 Interest Expense 525 El Payable 225 Office Supplies Expense 530 Income Tax Payable 230 Rent Expense 535 Salaries Payable 235 Salaries Expense 540 Unearned Revenue 240 Bank Charges Expense 545 Bank Loan 245 Maintenance Expense 550 SHAREHOLDERS' EQUITY Entertainment Expense Common Shares 300 Shipping Expense 560 Retained Earnings 305 Cash Over and Short 565

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Transactions for the month of February: Instructions: a) Prepare the journal entries for the following transactions for the month of February. You will also need to update the inventory in the table for each purchase and sale, return or allowance, found under the Inventory Valuation tab of this workbook Feb 1 Paid rent for February amounting to $660, Cheque #3354 Feb 1 Tees R Us decided to establish a petty cash fund for the office. A cheque #3355 of $500 was issued and cashed Purchased merchandise from Henley on account, invoice #425; 1100 units at $28 each. Terms of Feb 5 the purchase were 4/10, net 30, FOB Destination. The seller paid the shipping cost amounting to $55. Note: Update the Inventory Valuation table after each purchase Feb 7 Sold mechandise on accout to Arrow, 800 units at $75 each with invoice #2341. The invoice terms were 3/10, net 30, FOB Destination. Note: Update the Inventory Valuation table after each sale. Some of goods purchased from Henley were defective. Henley agreed to a 5% allowance on the total purchased. Feb 9 Note: You will need to update the Inventory Valuation table to reflect the allowance as it reduces the value of the inventory. Paid total liability with a cheque #3356 to Henley for the February 5 purchase less the allowance from Feb. 9. Feb 12 Note: You will need to update the Merchandise Inventory account to reflect any discount for early payment to supplier. The employees are paid bi-weekly. Paid the payroll for the first half of February, cheque #3357. Feb 15 Gross pay is $12,500, CPP is $638, El is $235 and income tax is $2,500. Use the general journal to record this. Feb 15 Record the employer's share of CPP (100%) and EI (140%) of what was deducted from employees. Feb 17 Arrow paid invoice #2341 on time and took advantage of the early payment discount. Bought inventory from Fabrica with cheque #3358, 1400 units at $30 per unit. Note: Update Feb 18 Inventory Valuation table to reflect purchase Sold 600 units on account at $90 each with invoice #2342 to Martin. The invoice term 3/10, net Feb 20 30, FOB shipping point. Note: Update Inventory Valuation table. Feb 20 Received $3,200 from Columbia for a sale on account last month. The remaining balance of the petty cash account was $150. Total expenses incurred using the Feb 25 petty cash fund this month amounting to $345. In this amount, it includes the shipping cost incurred on reb / in the amount of $55 and the other costs are for the office supplies expense. Propare the entry to replenish the potty cash fund with Chq#3359. Made monthly bank loan payment of $1,076 which includes $930 principal and $146 interest. Feb 28 Note: You need to debit the non-current portion of the bank loan for the principal payment. The current portion due will remain the same as the due date for the loan is greater than 12 months from balance sheet date. bjEnter the opening balances of the accounts from the January 31, 2021 Balance Sheet and post the above journal entries to the accounts.

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