The following activities took place in March:

Mar. 1(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.

1(c) Sold 22,500 Treasury shares at $2 each.

1(d) 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.)

1(e) Sold remote control helicopters valued at $298,000 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.

2 A 10% share dividend was declared when the market value per share was $2.1.

3 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.

4 Sold kids ride on cars to Vinga 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 Vinga Limited on 6 March.

5 The management determined that the amount due from a customer, MYTOM Limited, $50,000 is uncollectible as the company has closed down.

6 Purchased supplies of $4,100 on account from Jimmy Printing and Stationery Limited.

7(a) 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.

7(b) Received credit memorandum of $1,700 from Esorbma Limited for goods purchased in March.

*** for depreciation details

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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 201 Accounts Payable 112 Accounts Receivable 152 Accumulated Depreciation - Building 154 Accumulated Depreciation - Equipment 156 Accumulated Depreciation - Motor Vehicle 113 Allowance for Doubtful Accounts 151 Building 101 Cash 291 Dividends Payable 153 Equipment 115 Interest Receivable 140 Long-term Investment 121 Merchandise Inventory 155 Motor Vehicle 114 Notes Receivable 131 Prepaid Insurance 320 Retained Earnings 241 Salaries Payable 311 Share Capital - Ordinary S1 par value, 10,000,000 shares authorized, 6,000,000 shares issued and 5,977,500 shares outstanding 312 Share Capital - Preference 5%, $100 par value, noncumulative, 100,000 shares authorized, 60,000 shares issued and outstanding 313 Share Premium - Ordinary 314 Share Premium - Preference 315 Share Premium - Treasury 132 Supplies 330 Treasury Shares (22,500 shares) Debit (S) 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 (S) 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 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 201 Accounts Payable 112 Accounts Receivable 152 Accumulated Depreciation - Building 154 Accumulated Depreciation - Equipment 156 Accumulated Depreciation - Motor Vehicle 113 Allowance for Doubtful Accounts 151 Building 101 Cash 291 Dividends Payable 153 Equipment 115 Interest Receivable 140 Long-term Investment 121 Merchandise Inventory 155 Motor Vehicle 114 Notes Receivable 131 Prepaid Insurance 320 Retained Earnings 241 Salaries Payable 311 Share Capital - Ordinary S1 par value, 10,000,000 shares authorized, 6,000,000 shares issued and 5,977,500 shares outstanding 312 Share Capital - Preference 5%, $100 par value, noncumulative, 100,000 shares authorized, 60,000 shares issued and outstanding 313 Share Premium - Ordinary 314 Share Premium - Preference 315 Share Premium - Treasury 132 Supplies 330 Treasury Shares (22,500 shares) Debit (S) 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 (S) 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

Answer rating: 100% (QA)

ANSWER 1 When goods are purchased on FOB Shipping point the buyer or the customer pays for the freig... View the full answer