Question 1 Inventories, Current & Non-Current Assets, Liabilities, adjusting entries 20 marks Use XERO to establish a business that is titled as Question 1, Student ID Number and your Name as the Business name (e.g. Question1_1234567_Alireza_Vafaei) and record one-month transactions. Read the question very carefully. Requirements are provided on page 4 of the exam paper.

You opened a toy store for kids on 1 October 2020. The business trades under your name and student ID number and uses a perpetual inventory system to account for its inventory. Your business is registered for GST. End of financial year is 30 June.

Required 1. Prepare and submit an unadjusted trial balance for your business as of 30 October 2020. Use the classic version of the trial balance. The trial balance should be submitted in a PDF format to the LMS (16 marks).

2. Prepare and submit a journal report for the adjusting journal entries that you made on 31 October 2020. Please note that a journal report is required for only 31 October 2020 and the manual journal entries made on this date. The journal report should be submitted in a PDF format to the LMS (1.5 marks).

3. Prepare and submit a Profit and Loss statement for October 2020. This report should be submitted in a PDF format to the LMS (0.5 mark).

4. Prepare and submit a balance sheet for October 2020. This report should be submitted in a PDF format to the LMS (0.5 mark).

5. Calculate two liquidity, three profitability and one solvency ratios and, based on those, comment on the current performance of the company. In addition, you require to indicate what measures the company should take in order to improve its performance in future periods (maximum 300 words) (1.5 marks)

You opened a toy store for kids on 1 October 2020. The business trades under your name and student ID number and uses a perpetual inventory system to account for its inventory. Your business is registered for GST. End of financial year is 30 June. Inventory table Item code Item name Purchase price (incl. GST) per unit Sale price (incl. GST) per unit DPC Disney Princess Comfy $40 $70 Squad dolls BCME Bruder Cat Mini Excavator $100 Toys BDB Boogie Dancing Bob Toys $44 $64 ET Electric Train Toys $50 $88 $140 Transactions for the business in October 2020 are as follows. Date Description October 1 To get your business underway your contributed $570,000 cash into the business. You also borrowed $200,000 from the CBA Bank. This bank loan is a 5-year secured business loan, with an interest rate of 6% and monthly repayments of $4,000. The first instalment is due on 25 October 2020, October 1 You purchased a computer at a cost of $4,620 incl. GST for cash. Computer has a useful life of five years. It is depreciated using a diminishing balance method at a rate of 40% and a residual value of $326.60. October 2 You purchased 3,190 units of Princess Comfy Squad dolls from Funko toys on credit. October 2 You purchased an office desk at $968 incl. GST cash. Office desk has a useful life of five years and no residual value. It is depreciated using a straight-line method. October 3 You paid $1,760 rent (incl. GST) for October 2020. October 4 You purchased 847 units of Bruder Cat Mini Excavator Toys from Bruder Toys on credit. You promised to pay your liability on 5 November 2020. October 5 You sold 528 units of Disney Princess Comfy Squad dolls to Kid Brands on credit, terms 2/15, n/30. October 6 You granted credit to Kid Brands for 11 units of Disney Princess Comfy Squad dolls returned. October 6 You purchased office supplies for cash from Supplyclip for $9,350 incl. GST. October 8 You purchased 1,210 units of Boogie Dancing Bob Toys from Happy Factory, paid by cash on the same date. October 10 You sold 539 units of Bruder Cat Mini Excavator Toys to Incredible Toys on credit, terms 2/15, n/30. October 11 You granted credit to Incredible Toys for 11 units of Bruder Cat Mini Excavator Toys returned. Page 3 of 6 Date Description October 12 You purchased 990 units of Electric Train Toys from Charming Toys Company on credit October 13 You returned 11 units of Electric Train Toys to Charming Toys Company and received credit. October 14 You paid Funko toys for the purchase of inventories made on 2nd October in full. October 15 You received payment in full from Kid Brands, less discount. October 18 You received payment in full from Incredible Toys, less discount. October 21 You sold 550 units of Boogie Dancing Bob Toys to Just Play on credit. Just Play promised you to pay the amounts due on 21 November 2020. October 22 You paid Charming Toys Company in full. October 23 You sold 55 units of Electric Train Toys to Kinder Toys on credit. Kinder Toys promised to pay the full amounts on 25 October. October 25 You paid the first instalment due on the bank loan. October 28 After several attempts to collect receivables from Kinder Toys you finally write off Kinder Toys accounts as bad. You follow the allowance method to write off the bad debts. October 29 You sold the computer to Master Tech for $3,080 cash incl. GST. October 30 You discarded the office desk. October 31 Office supplies on hand at 31 October is $6,050 incl. GST. October 31 You record the adjusting entry for interest expense on the bank loan. October 31 Estimates of doubtful debts is 10% of Accounts Receivable as at 31 October. You record the adjusting entry for the allowance for doubtful debts account at 31 October. Required 1. Prepare and submit an unadjusted trial balance for your business as of 30 October 2020. Use the classic version of the trial balance. The trial balance should be submitted in a PDF format to the LMS (16 marks). 2. Prepare and submit a journal report for the adjusting journal entries that you made on 31 October 2020. Please note that a journal report is required for only 31 October 2020 and the manual journal entries made bis dat hitabenbecubittadir font to the IMC Icel You opened a toy store for kids on 1 October 2020. The business trades under your name and student ID number and uses a perpetual inventory system to account for its inventory. Your business is registered for GST. End of financial year is 30 June. Inventory table Item code Item name Purchase price (incl. GST) per unit Sale price (incl. GST) per unit DPC Disney Princess Comfy $40 $70 Squad dolls BCME Bruder Cat Mini Excavator $100 Toys BDB Boogie Dancing Bob Toys $44 $64 ET Electric Train Toys $50 $88 $140 Transactions for the business in October 2020 are as follows. Date Description October 1 To get your business underway your contributed $570,000 cash into the business. You also borrowed $200,000 from the CBA Bank. This bank loan is a 5-year secured business loan, with an interest rate of 6% and monthly repayments of $4,000. The first instalment is due on 25 October 2020, October 1 You purchased a computer at a cost of $4,620 incl. GST for cash. Computer has a useful life of five years. It is depreciated using a diminishing balance method at a rate of 40% and a residual value of $326.60. October 2 You purchased 3,190 units of Princess Comfy Squad dolls from Funko toys on credit. October 2 You purchased an office desk at $968 incl. GST cash. Office desk has a useful life of five years and no residual value. It is depreciated using a straight-line method. October 3 You paid $1,760 rent (incl. GST) for October 2020. October 4 You purchased 847 units of Bruder Cat Mini Excavator Toys from Bruder Toys on credit. You promised to pay your liability on 5 November 2020. October 5 You sold 528 units of Disney Princess Comfy Squad dolls to Kid Brands on credit, terms 2/15, n/30. October 6 You granted credit to Kid Brands for 11 units of Disney Princess Comfy Squad dolls returned. October 6 You purchased office supplies for cash from Supplyclip for $9,350 incl. GST. October 8 You purchased 1,210 units of Boogie Dancing Bob Toys from Happy Factory, paid by cash on the same date. October 10 You sold 539 units of Bruder Cat Mini Excavator Toys to Incredible Toys on credit, terms 2/15, n/30. October 11 You granted credit to Incredible Toys for 11 units of Bruder Cat Mini Excavator Toys returned. Page 3 of 6 Date Description October 12 You purchased 990 units of Electric Train Toys from Charming Toys Company on credit October 13 You returned 11 units of Electric Train Toys to Charming Toys Company and received credit. October 14 You paid Funko toys for the purchase of inventories made on 2nd October in full. October 15 You received payment in full from Kid Brands, less discount. October 18 You received payment in full from Incredible Toys, less discount. October 21 You sold 550 units of Boogie Dancing Bob Toys to Just Play on credit. Just Play promised you to pay the amounts due on 21 November 2020. October 22 You paid Charming Toys Company in full. October 23 You sold 55 units of Electric Train Toys to Kinder Toys on credit. Kinder Toys promised to pay the full amounts on 25 October. October 25 You paid the first instalment due on the bank loan. October 28 After several attempts to collect receivables from Kinder Toys you finally write off Kinder Toys accounts as bad. You follow the allowance method to write off the bad debts. October 29 You sold the computer to Master Tech for $3,080 cash incl. GST. October 30 You discarded the office desk. October 31 Office supplies on hand at 31 October is $6,050 incl. GST. October 31 You record the adjusting entry for interest expense on the bank loan. October 31 Estimates of doubtful debts is 10% of Accounts Receivable as at 31 October. You record the adjusting entry for the allowance for doubtful debts account at 31 October. Required 1. Prepare and submit an unadjusted trial balance for your business as of 30 October 2020. Use the classic version of the trial balance. The trial balance should be submitted in a PDF format to the LMS (16 marks). 2. Prepare and submit a journal report for the adjusting journal entries that you made on 31 October 2020. Please note that a journal report is required for only 31 October 2020 and the manual journal entries made bis dat hitabenbecubittadir font to the IMC Icel