FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Prepare the Journal
9(a) Sold flying disc and toy swings to Action Limited, list price of $140,000 with a 20% trade discount, n/20, FOB shipping point. The responsible party paid freight-charges of $500. The shipping document showed that the goods arrived at the warehouse of Action Limited on 12 March.
9(b) Paid Esorbma Limited for the children laptop toys bought on 1 March and the amount of $220,000 on account for the purchase on 27 February 2021. Purchases terms with Esorbma Limited in February was 2/10, n/30, FOB shipping point.
10 Paid $180,000 for salary up to 9th March (Tuesday). All employees work a five-day week and are paid every 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 $45,000 for a five-day work week.
12 Received payments from Vinga Limited, for the March sales.
13 Acquired $160,000 packing equipment by signing a 90-day, 5% notes payable. ITI started to use the equipment in April.
16 Queenie Company Limited, a customer, has financial difficulties and unable to pay the outstanding balance of $220,000. 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.
17 Share dividends were distributed. Shareholders on the register of the company on 6 March 2021 are entitled to receive the dividend shares.
21 Paid all cash dividends declared previously.
25 Received from Tom Limited, $180,000, as the prepayment for the leasing of part of the warehouse for one year from 1 April 2021 to 31 March 2022.
Transcribed Image Text:Intelligent Toys, Inc (“ITI") is a well establish toys trading company which adopts the periodic
system. ITI prepares its financial statements on a monthly basis. The trial balance of ITI as at
28 February 2021 is presented as follows:
Intelligent Toys, Inc
Trial Balance
As at 28 February 2021
Account No.
Account Title
Debit
Credit
($)
($)
201
Accounts Payable
420,000
112 Accounts Receivable
675,000
152 Accumulated Depreciation - Building
Accumulated Depreciation - Equipment
931,500
154
570,000
156 Accumulated Depreciation - Motor Vehicle
664,668
113
Allowance for Doubtful Accounts
20,250
151 Building
9,720,000
101
Cash
1,199,520
Dividends Payable
153 Equipment
291
220,000
990,000
115 Interest Receivable
144,000
140 Long-term Investment
121 Merchandise Inventory
750,000
975,000
155 Motor Vehicle
832,500
114 Notes Receivable
2,800,000
131 Prepaid Insurance
320 Retained Earnings
241 Salaries Payable
Share Capital – Ordinary
18,000
2,077,212
117,000
311
$1 par value, 10,000,000 shares authorized,
6,000,000 shares issued
and 5,977,500 shares outstanding
6,000,000
312 Share Capital – Preference
5%, $100 par value, noncumulative,
100,000 shares authorized,
60,000 shares issued and outstanding
6,000,000
313 Share Premium –
Ordinary
840,000
314 Share Premium – Preference
300,000
315 Share Premium – Treasury
8,000
132 Supplies
330 Treasury Shares (22,500 shares)
8,360
56,250
18,168,630
18,168,630
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