Sandhill Fabrications Ltd. sells greenhouse kits to retailers and garden centres. The company's post-closing trial balance at December 31, 2020, the end of its fiscal year, is presented below: SANDHILL FABRICATIONS LTD. Post-Closing Trial Balance December 31, 2020 Debit Credit Cash $153,600 Accounts receivable 1,104,000 Supplies 3.600 Inventory 548,400 Equipment 2,736.000 Accumulated depreciation-equipment $456.000 Accounts payable 492,000 Interest payable 6,000 Salaries payable 40.800 Deferred revenue 144,000 Bank loan payable 2,400,000 Common shares 300,000 Retained earnings 706.800 $4,545,600 $4,545,600 Sandhill had the following transactions during January 2021: Jan. 1 The bank loan bears interest at 3% and requires monthly payments on the first day of the month consisting of principal of $24,000 plus interest. The interest for December 2020 was properly accrued at the end of 2020. Received payments of $213,600 from customers in payment of their accounts. 8 13 15 17 Made sales on account totalling $259,200 to garden centres. The greenhouse units sold had cost Sandhill $146,400. Purchased additional greenhouse kits from a supplier on account for $90,000. Paid accounts payable that were due to creditors totalling $144,000. Paid salaries of $84,000, which included the accrued salaries owing at the end of 2020 and $43,200 related to salaries earned to date in January. 18 21 Purchased supplies on account for $1,800. Received a shipment of additional greenhouses from a supplier. The invoice for $117,600 is due in 30 days. 24 26 Made sales of $151,200, of which $69,600 was on account and the remainder was cash. The cost of the greenhouses sold was $81,600 Delivered a custom greenhouse that a customer had ordered and put a $30,000 deposit down on. The total sales price was $60,000 and the greenhouse had cost Sandhill $42.000. The customer paid the outstanding balance in cash. 31 Sandhill reconciles its bank account at the end of every month and makes any necessary journal entries. The following information was gathered from reviewing the company's bank statement for the month of January: 1. 2. 3. There were outstanding cheques of $14.400. The service charges on the account were $50 for the month. A deposit for $30,000 was made using the bank's night depository slot on January 31. This deposit is not reflected on the company's bank statement for January. A cheque from one of Sandhill's customers for $11,760 that had been deposited during the month was returned by the bank due to the customer having insufficient funds in their account. 4. 5. The company's account balance at January 31 was $217,390 according to the bank statement. Sandhill records adjustments monthly on the last day of the month. Adjusting entries were required for the following: 1. Record depreciation on the equipment assuming that Sandhill uses the straight-line method to depreciate its equipment and the equipment is expected to have a useful life of six years. Accrue interest for the month on the bank loan. 2. 3. When supplies were counted, it was determined that supplies with a cost of $1,560 were still on hand. Accrued salaries payable are $43,200. 4. 5. The company earned $67,200 of the deferred revenue. The cost of the goods sold was $46,800. The estimated income taxes owing for the month of January was $19,200. 6. Prepare the bank reconciliation at January 31, 2021. (List items that increase balance as per bank & books first.) SANDHILL FABRICATIONS LTD. Bank Reconciliation January 31, 2021 Cash balance per bank $ Add : Deposits in transit Less : Outstanding cheques Bank service charge $ Reconciled cash balance per books $ Less : NSF cheque