Jack Smith, a baker, has been working at his friend’s bakery a part…


Jack Smith, a baker, has been working at his friend’s bakery a part… Jack Smith, a baker, has been working at his friend’s bakery a part time basis for the past 3 years. As of January 1, 2018, Jack decided to pursue his own dreams of buying and selling pastries. He rented a space from his friend and entered the following transactions during January 2022:Jan 1     Jack invested the following assets into the business: cash, $12,000; office equipment, $30,000 and a bank balance of $80,000.Jan 2    Paid rent for January by cheque $15,000 and purchased motor vehicle on credit from Deals on Wheels Ltd. for $50,000.Jan 3    Bought office furniture from Kurtz JA. Ltd, paying by cheque $15,000 and bought merchandise for resale by cheque $20,000.Jan 3    Sold merchandise to Candy Lou, for cash $10,000.Jan 4    Sold merchandise on credit to Patrick Poser $40,000.Jan 5    Sold merchandise on credit to Janice Russell $4,500.Jan 6    Patrick Poser settled his account with cash receiving a 5% cash discount. (Tip rough check of the balance owed by Patrick Poser)Jan 6    Merchandise valued at $1,050, sold to Janice Russell on January 5, was returned to Jack Smith. A credit note was given to Janice Russell.Jan 7    Sold merchandise on credit to J.F. Mills Ltd $33,000.Jan 8    Bought merchandise on credit from Natalie Lowe $12,000.Jan 11    Received a long-term loan from VTBC Bank for $ 45,000 by cheque and bought stationery for cash $12,000.Jan 15    Bought merchandise on credit from Nikkita Morgan $17,500.Jan 18    Lodged cash of $13,500 to the business bank accountJan 20    Jack took pastries for his daughter’s 5th birthday party amounting to $7,000Jan 20    Paid Natalie Lowe $10,800 in full settlement of the balance outstanding by cheque having received a discount of $1,200 (Tip: rough check of the balance owed to Natalie Lowe)Jan 25    Commission was received by cash, $5,000 and paid wages by cash $15,000.Jan 27    Purchased merchandise on credit from Kukupas Creations for $8,000.Jan 30    Paid electricity by cash $5,600, insurance $12,000 by cheque.REQUIRED:                                                                                 Journalize the following adjusting entries using the following information:Rent was prepaid by approximately $1,500.One employee complained that her salary was short by $500. Investigations proved that the employee was indeed short paid for the month.Seven hundred dollars ($800) of the commission received related to the month of February 2022The insurance paid for the shop is the annual premium. It should be recorded to the expense on a monthly pro rata basis.It was found that of J F Mills’ balance, $4,000 must be written off as bad debts.For the first month of operation, depreciation annually is calculated at:Office furniture – 10% Straight LineMotor Vehicle – 5% Straight LineOffice Equipment – 10% Straight lineNote: when doing the adjusted T accounts only the accounts that have been affected need to be done        (5 marks)the above adjusting entries to their respective accounts in the general ledger creating additional accounts as the journals would dictate. (Please refer to notes re the journals)        (5 marks) an adjusted trial balance with the inclusion of the above balances (5 marks) the Statement of Profit or Loss and the Statement of Financial Position for the period under review.  For use in the financial statements, closing stock amounts to $5,000 at the end of the month.        (18 marks) Business Accounting Share (0)

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