Question 1 Limitless Sports Ltd. distributes limited edition sports shoes to retail stores. During the month of August. the following merchandising transactions occurred. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{3}{|c|}{ CREDIT MEMO } & Form 3 \\ \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Nick Sports \\ 27 Peachtree Drive, Atlanta, GA 30303 \end{tabular}} \\ \hline Sold To: & \begin{tabular}{l} Limitless Sports Ltd. \\ 2248 Sunrise Towers \\ Minot, ND 58701 \end{tabular} & \begin{tabular}{r} Date: \\ Invoice No: \\ Terms: \end{tabular} & \begin{tabular}{l} 7 August 2022 \\ CM5890 \\ 1/10,n/60 \end{tabular} \\ \hline Quantity & Description & Unit Cost & Amount \\ \hline 2 & Limited cdition Shoes V2022 & Total & \\ \hline & Cust & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{5}{|c|}{\begin{tabular}{l} Limitless Sports Ltd. \\ Interoffice Memo \end{tabular}}} \\ \hline & & & & \\ \hline To: & Bookkeeper & & Date: & 15 August 2022 \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline \begin{tabular}{l} Trendy World \\ 58 Edgewater Lane \end{tabular} & \multicolumn{1}{c|}{ Form 6} \\ Minot, ND 58701 & Check No. 5719 \\ & Date: 18 August 2022 \\ Pay to the order of Limitless Sports Ltd & D xxxxx \\ xxxxxxxxxxxxx & Dollars \\ Queensland Bank & Acet Dept Copy \\ lnvoice Number 5231 dated 7 August 2022 & \\ \hline \end{tabular} 3 Limitless Sports' chart of accounts includes the following: Cash, Accounts Receivable, Inventory, Accounts Payable, Sales Revenue, Sales Returns and Allowances, Sales Discounts, Cost of Goods Sold, Purchase discount taken, Transportation-in and Delivery Expense. Instructions Journalize the transactions for the month of August for Limitless Sports Ltd. using a perpetual inventory system. Sales and purchases are recorded using gross invoice price. (Transportation fees are evenly allocated to sales and purchase transactions) Question 2 The following information is also provided for reconciling the bank statement and accounting record: 1. The company had a cash balance per books of $16,781.50. The bank statement on that date showed a balance of $17,424.60. 2. Deposits in transit $1916.15. 3. Checks written by the company but not yet paid by bank was $256.25. 4. A $3,000 note receivable was collected by the bank for Marvel on December 31 plus $84 interest. No interest has been accrued on the note. 5. On December 31, the bank statement showed an NSF check of $640 issued by Sandy Grifton, a customer. 6. A check printing charge of $60 was charged to the bank account. 7. Payment of Check No. 3480 written as $890 was found to be recorded wrongly as $809 by the company. Instructions (a) Prepare a bank reconciliation at December 31. (b) Prepare the adjusting entries based on the reconciliation. Question 3 Smart Company was established in January 2021 with authorization to issue 10,0008% cumulative preference share with $50 par value and 2,000,000 ordinary shares with $1 par value. At incorporation, the company issued 8,000 preference shares for $500,000 cash and 1,050,000 ordinary shares for $2,602,000. No dividend is paid in 2021 and retained earnings at 31 December 2021 was $1,816,000. During 2022, the corporation had the following transactions and events pertaining to its equity. Jan 25 Purchased 20,000 ordinary shares for the treasury at a cost of $3 per share. Apr. 14 Reissued 10,000 treasury shares-ordinary for $42,000. Nov. 10 Reissued 5,000 treasury shares-ordinary for $12,000. Net income for the year 2022 was $452,000. At 31 Dee 2022, it declared a dividend of \$1 per ordinary share, to be payable in April 2023. Insiructions (a.) Journalize the transactions related to treasury shares. (b.) Prepare the equity section of the statement of financial position at December 31, 2022
