- (1)Input the Journal Entries required in part (b) with the Account Number ("Account No") and Amount into blackboard. Please input the items required as shown in page 7 & 8. Please refer to the chart of accounts on page 14. (32 marks)
- (2)Input the Journal Entries required in part (e) with the Account No and Amount into blackboard. Please input the items required as shown in page 9. (22 marks)
- (3)Input the balance of each account of the trial balance required in part (f) into blackboard. Please input the items required as shown in page 10. (26.5 marks)
- (4)Input the figures of part (g) including the income statement and retained earnings statement for September and statement of financial position as at March 31 into blackboard. Please input the items required as shown in page 11, 12 &13. (19.5 marks)
Intelligent Toys, Inc (\"III\") is a well establish toys trading company which adopts the periodic system. ITI prepares its nancial statements on a monthly basis. The trial balance of ITI as at 28 February 2021 is presented as follows: Account No. 201 112 152 154 156 113 151 101 291 153 115 140 121 155 114 131 320 241 311 312 313 314 315 132 330 Intelligent Toys, Inc Trial Balance As at 28 February 2021 Account Title Accounts Payable Accounts Receivable Accumulated Depreciation - Building Accumulated Depreciation - Equipment Accumulated Depreciation - Motor Vehicle Allowance for Doubtil Accounts Building Cash Dividends Payable Equipment Interest Receivable Long-term Investment Merchandise Inventory Motor Vehicle Notes Receivable Prepaid Insurance Retained Earnings Salaries Payable Share Capital Ordinary $1 par value, 10,000,000 shares authorized, 6,000,000 shares issued and 5,977,500 shares outstanding Share Capital 7 Preference 5%, $100 par value, noncumulative, 100,000 shares authorized, 60,000 shares issued and outstanding Share Premium Ordinary Share Premium Preference Share Premium Treasury Supplies Treasury Shares (22,500 shares) Debit ($) 675,000 9,720,000 1,001,520 990,000 144,000 750,000 975,000 832,500 2,700,000 18,000 9,360 56,250 17,871,630 Credit 6) 420,000 745,200 570,000 664,668 20,250 120,000 2,077,212 105,300 6,000,000 6,000,000 840,000 300,000 9,000 17,871,630 The following activities took place in March: Mar. 1(a) 1 (0) 1(d) 1 (e) 7(a) 7(b) 9(a) Purchased children laptop toys from Esorbma Limited, $95,000, terms 1/10, n/30, FOB shipping point. (b)The responsible party paid the freight charges of $500. The goods were collected by the shipping company on 1 March and arrived at ITI's warehouse on 4 March. Sold 22,500 Treasury shares at $2 each. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to note (c) of additional information.) Sold remote control helicopters valued at $297,000 to TnecNiv Limited, a wholesaler, terms n/20, FOB destination. The appropriate party paid delivery charges of $600. The goods were shipped on 1 March and arrived at the warehouse of TnecNiv Limited on 3 March. A 10% share dividend was declared when the market value per share was $2.1. Cash is received from TnecNiv Limited for the remote-control helicopters shipped on 1 March and arrived at the warehouse of TnecNiv Limited on 3 March. Sold kids ride on cars to Vmga Limited, $140,000, terms n/30, FOB shipping point, 2% trade discount. The appropriate party paid freight charges of $400. The goods were shipped on 4 March and arrived at the warehouse of Vmga Limited on 6 March. The management determined that the amount due from a customer, MYTOM Limited, $50,000 is uncollectible as the company has closed down. Purchased supplies of $4,200 on account 'om Jimmy Printing and Stationery Limited. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus. Received credit memorandum of $1,700 from Esorbma Limited for goods purchased in March. Granted Vmga Limited an allowance of $1,000 (original price) due to discrepancy in the color of the ride on cars. Sold ying disc and toy swings to Action Limited, list price of $ 120,000 with a 20% trade discount, N20, FOB shipping point. The responsible party paid Mar 9(1)) 10 12 13 16 17 21 25 27 28 29 30 freight-charges of $800. The shipping document showed that the goods arrived at the warehouse of Action Limited on 12 March. Paid Esorbma Limited for the children laptop toys bought on 1 March and the amount of $230,000 on account for the purchase on 27 February. Purchases terms with Esorbma Limited in February was 2/10, nf30, FOB shipping point. Paid $162,000 for salary up to 9\"1 March (Tuesday). All employees work a ve-day week and are paid evgy four weeks on the following Wednesday, based on the number of days they have worked in the last four weeks. Employees are entitled to full pay on public holidays but not on Saturday and Sunday. The employees receive a total salary of $40,500 for a ve-day work week. Received payments from Vmga Limited, for the March sales. Acquired $150,000 toy musical instruments by signing a 90-day, 5% notes payable. Queenie Company Limited, a customer, has nancial difculties and unable to pay the outstanding balance of $200,000. The company has a long-term relationship with Queenie, and agreed to accept a 12%, 45-day notes from the customer to settle the outstanding balance. Share dividends were distributed. Shareholders on the register of the company on 6 March 2021 are entitled to receive the dividend shares. Paid all dividends declared previously. Received from Tom Limited, $180,000, as the prepayment for the leasing of part of the warehouse for one year from 1 April 2021 to 31 March 2022. Received inatable castle of $40,000 consignment goods returned from Consignee Trading Limited. The goods are delivered to Consignee Trading Limited for consignment purpose in February 2021. Purchased $23,000 play mats from Millan Company, FOB Destination, terms 1/10, nf45. The shipping document showed that the goods were received on 3rd April 2021. A cash dividend was declared for preference shares and a cash dividend of $0.03 per share was declared for ordinary shares. The dividends will be paid in April. Received a check of $16,000 from the liquidator of YOT Limited. YOT Limited was closed down in December 2020 and the managing director of ITI authorized to write off $45,000, being the full amount outstanding in the accounts of YOT Limited, as of then. (a) (b) (d) (e) (f) (g) (h) (i) The following additional information is available on 31 March 2021: Electricity incurred for the month amounted to $7,000. The employees receive a total salary of $40,500 for a ve-day work week. All employees worked for the whole month of March. (i)Building, (ii) equipment and (iii) motor vehicles are recorded at historical cost and their estimated useful lives are 50 years, 5 years and 5 years respectively. No residual value is expected for the building. The building was acquired on 1 May 201 T. The company uses straight-line method for all buildings. All the equipment and motor vehicles are acquired on 1 January 2018. The company uses unit of activity method to depreciate equipment and the double-declining balance method to depreciate all motor vehicles. The company expects that the salvage value of the equipment and motor vehicles is 10 % of the purchase cost. The equipment is for packing and the total amount of packing for 5 years are estimated to be 594,000 units. The total packing in March amounted to 9,800 units. Annual depreciation is calculated for each year from 1 January to 31 December, monthly depreciation is equal to (annual depreciation)f 12). Physical count showed that $4,000 of supplies and $1,186,000 of merchandise inventory remained on hand at 31 March 2021. The bank statement balance is $1,000 greater than the cash account balance. This is relating to an unpresented cheque of the dividends paid on 21 March 2021 . The prepaid insurance was paid in last December covering a 12-month general insurance from January to December, 2021. Allowance for bad debt is estimated based on 10% of the closing accounts receivable balance due to dramatical down turn of the economy. Recognize interest expense for the month. Recognize interest revenue for the month. Instructions (The following is the procedures of the accounting cycle after analyzing the source documents for transactions taken place) (a) Enter the March 1 balances in the ledger accounts. (for your own reference) (b) Joumalize the March transactions. The alternative treatment in Slide 18 of Lecture 4 powerpoints is not adopted by ITI. Use the accounts provided in the chart of accounts on page 14. (c) Post to the ledger accounts. (for your own reference) (d) Prepare a trial balance at 31 March 2021. (for your own reference) (e) Journalize and post adjusting entries. (posting is for your own reference) (1') Prepare an adjusted trial balance. (g) Prepare an income statement and a retained earnings statement for March and a statement of financial position as at 31 March 2021. Requirement 1 (128 points) 1 point for each item Input "0" if no entry is needed! *With more than one debit entry or more than one credit entry, input the entries with smaller Account No. first. Date Dr/Cr Account No. Amount $ Mar 1 (a) Dr Item1 Item 2 Cr Item 3 Item 4 Mar 1 (b) Dr Item5 Item 6 Cr Item 7 Item 8 *Mar 1 (c) Dr Item9 Item 10 Dr Item1 1 Item 12 Dr Item13 Item 14 Cr Item 15 Item 16 *Mar 1 (d) Dr Long Term Investment Item17 Item 18 Dr Item19 Item 20 Dr Item21 Item 22 Cr Item23 Item 24 Cr Item25 Item 26 Cr Item27 Item 28 Cr Item29 Item 30 Mar 1 (e) Dr Item31 Item 32 Cr Item33 Item 34 *Mar 2 Dr Item35 Item 36 Cr Item37 Item 38 Cr Item39 Item 40 Mar 3 Dr Item41 Item 42 Cr Item43 Item 44 Mar 4 Dr Item45 Item 46 Cr Item47 Item 48 Mar 5 Dr Item49 Item 50 Cr Item51 Item 52 Mar 6 Dr Item53 Item 54 Cr Item55 Item 56 Mar 7 (a) Dr Item57 Item 58 Cr Item59 Item 60 Mar 7 (b) Dr Item61 Item 62 Cr Item63 Item 64 7\fRequirement 2 (88 points) 2 points for each item Adjusting entries Date Dr/Cr Account No. Amount $ (a) Dr Item 129 Item 130 Cr Item 131 Item 132 (b) Dr Item 133 Item 134 Cr Item 135 Item 136 (c)(i) Dr Item 137 Item 138 Cr Item 139 Item 140 (c)(ii) Dr Item 141 Item 142 Cr Item 143 Item 144 (c)(iii) Dr Item 145 Item 146 Cr Item 147 Item 148 (d) Dr Item 149 Item 150 Cr Item151 Item 152 (e) Dr Item 153 Item 154 Cr Item 155 Item 156 (f) Dr Item 157 Item 158 Cr Item 159 Item 160 g Dr Item 161 Item 162 Cr Item 163 Item 164 (h) Dr Item 165 Item 166 Cr Item 167 Item 168 (i) Dr Item 169 Item 170 Cr Item 171 Item 172 9Requirement 3 (106 points) 2 points for each item Adjusted Trial Balance as at 31 March 2021 Account Dr $ Cr $ No 201 Accounts Payable Item 173 112 Accounts Receivable Item 174 152 Accumulated Depreciation - Building Item 175 154 Accumulated Depreciation - Equipment Item 176 156 Accumulated Depreciation - Motor vehicle Item 177 113 Allowance for Doubtful Accounts Item 178 611 Bad Debt Expense Item 179 151 Building Item 180 101 Cash Item 181 711 Depreciation Expense - Building Item 182 712 Depreciation Expense - Equipment Item 183 713 Depreciation Expense - Motor Vehicle Item 184 291 Dividends Payable Item 185 153 Equipment Item 186 514 Freight-in Item 187 612 Freight-out Item 188 613 Fuel Expense Item 189 820 Gain on Disposal Item 190 615 Insurance Expense Item 191 631 Interest Expense Item 192 221 Interest Payable Item 193 115 Interest Receivable Item 194 415 Interest Revenue Item 195 150 Land Item 196 140 Long-term Investment Item 197 620 Loss on Disposal Item 198 121 Merchandise Inventory Item 199 630 Miscellaneous Expense Item 200 155 Motor Vehicle Item 201 231 Notes Payable Item 202 114 Notes Receivable Item 203 316 Ordinary Share Dividends Distributable Item 204 131 Prepaid Insurance Item 205 513 Purchase Discounts Item 206 512 Purchase Returns and Allowances Item 207 511 Purchases Item 208 320 Retained Earnings Item 209 616 Salaries Expense Item 210 241 Salaries Payable Item 211 411 Sales Returns and Allowances Item 212 410 Sales Revenue Item 213 311 Share Capital - Ordinary Item 214 312 Share Capital - Preference Item 215 313 Share Premium - Ordinary Item 216 314 Share Premium - Preference Item 217 315 Share Premium - Treasury Item 218 132 Supplies Item 219 618 Supplies Expense Item 220 330 Treasury Shares Item 221 281 Unearned Rent Revenue Item 222 619 Utilities Expense Item 223 Item 224 Item 225 10Requirement 4 (78 points) 5 points for each item except Item 234 Intelligent Toys, Inc. Income Statement For the month ended 31 March 2021 Net Sales Item 226 Cost of goods purchased Item 227 Cost of goods available for sale Item 228 Cost of Goods Sold Item 229 Gross Profit Item 230 Total operation expense Item 231 Operating Profit Item 232 Net Income Item 233 11Intelligent Toys, Inc. Retained Earnings Statement For the month ended 31 Math 2021 Ending retained Earnings (3 points) Intelligent Toys, Inc. Statement of Financial Position as at 31 March 2021 Property, Plant and Equipment Current Liabilities Sub-total Item 235 Sub-total Item 239 Long Term Investments Item 236 Equity Current Assets Subtotal Item 237 Sub-total Item 240 Total Assets Item 238 Total Liabilities 3' Equity Item 241 13 Chart of Accounts Account No Account Names Account No Account Names 201 Accounts Payable 121 Merchandise Inventory 112 Accounts Receivable 630 Miscellaneous Expense 152 Accumulated Depreciation - Building 155 Motor Vehicle 154 Accumulated Depreciation Equipment 231 Notes Payable 156 Accumulated Depreciation Motor vehicle 114 Notes Receivable 113 Allowance for Doubtful Accounts 316 Ordinary Share Dividends Distributable 611 Bad Debt Expense 131 Prepaid Insurance 151 Building 513 Purchase Discounts 101 Cash 512 Purchase Returns and Allowances 711 Depreciation Expense Building 511 Purchases 712 Depreciation Expense Equipment 320 Retained Earnings 713 Depreciation Expense Motor Vehicle 241 Salaries Payable 291 Dividends Payable 616 Salaries Expense 153 Equipment 410 Sales Revenue 514 Freight-in 411 Sales Returns and Allowances 612 Freight-out 311 Share Capital Ordinary 613 Fuel Expense 312 Share Capital Preference 820 Gain on Disposal 313 Share Premium Ordinary 615 Insurance Expense 314 Share Premium Preference 631 Interest Expense 315 Share Premium Treasury 221 Interest Payable 132 Supplies 115 Interest Receivable 618 Supplies Expense 415 Interest Revenue 330 Treasury Shares 150 Land 281 Unearned Rent Revenue 140 Long-term Investment 619 Utilities Expense 620 Loss on Disposal 14
