1. Prepare the journal entries, with appropriate journal entry descriptions, for 2020, including any required year-end adjusting entries. The company prepares annual adjusting entries.

2. Prepare the Statement of Financial Position, the Statement of Retained Earnings, and the Statement of Earnings for 2020.

Account name	Debit CAD$	Credit CAD$
Cash	423,177
Accounts receivable	137,000
Prepaid insurance	5,400
Inventory	149,000
Machinery	53,000
Accumulated depreciation – Machinery	25,864
Furniture and Fixtures	123,000
Accumulated depreciation – Furniture and Fixtures	30,750
Computer equipment	4,650
Accounts payable	45,000
Dividends payable	10,000
Contributed capital	75,000
Retained earnings	140,386
Revenue	2,630,000
Purchases	606,800
Salaries and wages expense	1,281,913
Advertising expense	16,000
Repairs and maintenance	18,370
Rent expense	96,000
Laundry expense	18,250
Utilities expense	14,440
Administrative expense	10,000
$2,957,000	$2,957,000

1. During the year, TBTI paid parking rental fees via automatic e-transfer from the bank account. The payroll clerk had set up the automatic e-transfer via online banking in early 2020. There were 12 instalments made in the amount of $250 each. The December bank reconciliation reflects the total payment made as a reconciling item on the book side. Bank reconciliations are prepared by Estelle on an annual basis.

2. In the prior year TBTI had paid the entire year’s insurance policy upfront which expired as of December 31, 2020. The insurance premium for 2021 is $5,600. TBTI renewed and paid half the 2021 insurance premium on December 21, 2020.

3. The information below relates to capital assets. Ensure you consider item #4 below regarding repairs and maintenance before preparing any capital asset calculations.

Date of purchase	Depreciation method	Special notes
Machinery	January 1, 2017	Double declining Estimated useful life 10 years
Bakery fixtures	January 1, 2018	Straight line Estimated useful life 8 years	As of January 1, 2020 Estelle believes the Bakery fixtures have a remaining useful life of 5 years
Computer Equipment	May 1, 2020	Double declining Estimated useful life 5 years

4. The breakdown for repairs and maintenance expense per the trial balance is as follows: (you need to consider if all these items should in fact be classified as repairs and maintenance)

Machinery – new part (increases efficiency of machinery) – Jan 1, 2020	$5,900
Cleaning of kitchen equipment – June 12, 2020	$660
Annual pesticide control	$2,000
Dishwasher draining problem – part time labour to fix – July 3, 2020	$320
Anti-rust spray for machinery – March 15, 2020	$490
Large refrigerator purchased – Jan 1, 2020	9,000
Total	$18,370

Answer rating: 100% (QA)

The financial position statement is the Balance sheet as on the last date of the financial year Re... View the full answer