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 29 February 2020 is presented as follows:

Account No.	Account Title	Debit	Credit
		($)	($)
201	Accounts Payable		280,000
112	Accounts Receivable	450,000
152	Accumulated Depreciation - Building		496,800
154	Accumulated Depreciation - Equipment		380,000
156	Accumulated Depreciation - Motor Vehicle		443,112
113	Allowance for Doubtful Accounts		13,500
151	Building	6,480,000
101	Cash	667,680
291	Dividends Payable		80,000
153	Equipment	660,000
115	Interest Receivable	96,000
140	Long-term Investment	500,000
121	Merchandise Inventory	650,000
155	Motor Vehicle	555,000
114	Notes Receivable	1,800,000
131	Prepaid Insurance	12,000
320	Retained Earnings		1,384,808
241	Salaries Payable		70,200
311	Share Capital Ordinary $1 par value, 5,000,000 shares authorized, 4,000,000 shares issued and 3,985,000 shares outstanding		4,000,000
312	Share Capital Preference 4%, $100 par value, noncumulative, 50,000 shares authorized, 40,000 shares issued and outstanding		4,000,000
313	Share Premium Ordinary		560,000
314	Share Premium Preference		200,000
315	Share Premium Treasury		6,000
132	Supplies	6,240
330	Treasury Shares (15,000 shares)	37,500
		11,914,420	11,914,420

The following activities took place in March: Mar. 1(a) Purchased children laptop toys from Ambrose Limited, $93,000, terms 1/10, n/30, FOB shipping point. (b)The responsible party paid the freight charges of $400. The goods were collected by the shipping company on 1 March and arrived at ITIs warehouse on 4 March. 1(c) Sold 15,000 Treasury shares at $2 each. 1(d) Purchased 10% shareholding in Charlotte Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,000,000 as at 1 March. The purchase consideration included a $1,800,000 note receivable due from Charlotte Limited and the related interest receivable balance of $96,000, $94,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $80,000. 1(e) Sold remote control helicopters valued at $289,000 to Vincent Limited, a wholesaler, terms n/20, FOB destination. The appropriate party paid delivery charges of $500. The goods were shipped on 1 March and arrived at the warehouse of Vincent 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 Vincent Limited for the remote-control helicopters shipped on 1 March and arrived at the warehouse of Vincent Limited on 3 March. 4 Sold kids ride on cars to Gavin Limited, $83,300, terms n/30, FOB shipping point. The appropriate party paid freight charges of $315. The goods were shipped on 4 March and arrived at the warehouse of Gavin Limited on 6 March. 5 The management determined that the amount due from a customer, Tommy Limited, $34,500 is uncollectible as the company has closed down. 6 Purchased supplies of $4,800 on account from Jimmy Printing and Stationery Limited. 7(a) Paid cash to acquired 20,000 shares of its own at $2.3 each. 7(b) Received credit memorandum of $1,200 from Ambrose Limited for goods purchased in March. 8 Granted Gavin Limited an allowance of $980 (original price) due to discrepancy in the color of the ride on cars. 9 Sold flying disc and toy swings to Action Limited, list price of $82,075 with a 20% trade discount, n/20, FOB shipping point. The responsible party paid freight- charges of $640. The shipping document showed that the goods arrived at the warehouse of Action Limited on 12 March. Mar. 10 Paid Ambrose Limited for the children laptop toys bought on 1 March and the amount of $140,000 on account for the purchase on 28 February. Purchases terms with Ambrose Limited in February was 2/10, n/30, FOB shipping point. 11 Paid $108,000 for salary up to 10th 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. 12 Received payments from Gavin Limited, for the March sales. 13 Acquired $100,000 toy musical instruments by signing a 90-day, 5% notes payable. 16 Queenie Company Limited, a customer, has financial difficulties and unable to pay the outstanding balance of $210,000. The company has a long-term relationship with Queenie, and agreed to accept a 12%, 60-day notes from the customer to settle the outstanding balance. 17 Share dividends were distributed. 21 Paid all dividends declared previously. 25 Received from Tom Limited, $120,000, as the prepayment for the leasing of part of the warehouse for one year from 1 April 2020 to 31 March 2021. 27 Delivered inflatable castle of $39,750 on consignment to Vincent Trading Limited. 28 Purchased $23,450 play mats from McMillan Company, FOB Destination, terms 1/10, n/45. The shipping document showed that the goods were received on 3rd April 2020. 29 A cash dividend was declared for preference shares and a cash dividend of $0.04 per share was declared for ordinary shares. 30 Received a check of $15,525 from the liquidator of Tony Limited. Tony Limited was closed down in December 2019 and the managing director of ITI authorized to write off $45,000, being the full amount outstanding in the accounts of Tony Limited, as of then. The following information is available on 31 March 2020: (a) Electricity incurred for the month amounted to $4,800. (b) The employees receive a total salary of $27,000 for a five-day work week. All employees worked for the whole month of March. (c) (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 2016. The company uses straight-line method for all buildings. All the equipment and motor vehicles are acquired on 1 January 2017. 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 / 12). (d) Physical count showed that $3,000 of supplies and (e) $698,000 of merchandise inventory remained on hand at 31 March 2020. (f) The prepaid insurance was paid in last December covering a 12-month general insurance from January to December, 2020. (g) Allowance for bad debt is estimated based on 10% of the closing accounts receivable balance due to dramatical down turn of the economy. (h) Recognize interest expense for the month. (i) Recognize interest revenue for the month.

Questions:

(a) Enter the March 1 balances in the ledger accounts. (b) Journalize the March transactions. (c) Post to the ledger accounts. (d) Prepare a trial balance at 31 March 2020. (e) Journalize and post adjusting entries. (f) 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 2020.