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Question Two: (25 Marks: 5 marks each): On September 1, Reid Supply had an inventory of 15 backpacks at a cost of $20 each. The company uses a perpetual inventory system. During September, the following transactions and events occurred. Sept. 4 Purchased 80 backpacks at $20 each from Hunter, terms 2/10,n/30 Sept. 6 Received credit of $120 for the return of 6 backpacks purchased on Sept. 4 that were defective. Sept. 9 Sold 40 backpacks for $25 each to Oliver Books, terms 2/10, 1/30. Sept. 14 Paid Hunter in full, less discount. Instructions Post the above transactions to the ledger of Inventory account in Reid Supply books and find the ending balance. The beginning balance is added to the account already. Dr Inventory Cr $300 Sep. 14 Sep 30 Question Three: 20 marks (5 marks each): Presented below is an adjusted trial balance for Cowell Company, at December 31, 2017 Cash 10,700 Accounts payable Accounts receivable 10,000 20,000 Notes payable 9,000 Prepaid insurance 15,000 Accumulated depreciation- Equipment 35,000 equipment 14,000 Depreciation expense 7.000 Service revenue 30,000 Dividends 1,500 Retained earnings 12,000 Advertising expense Unearned service revenue 11,000 Rent expense 800 Share capital-ordinary 12.000 Salaries and wages expense 5,000 Insurance expense 1.600 98.000 98.000 Instructions: Post the closing entries to the retained earnings account, and determine the ending balance after the closing entries have been posted. Dr Retained Earnings Cr 1,400 Jan. 15 Jan. 30 Question Four: 25 marks: Explain the Accounting cycle

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