Assessment 2:

Weighting: 40%

Due Date: March 16th, 2023 @ 11:55 PM ECT

Related Course Objectives:

1. Describe the system of accounting standards and principles to utilize these in the
preparation and communication of relevant financial information.
2. Apply the accrual method of accounting and the accounting cycle in preparation of
financial statements.
3. Prepare a balance sheet and income statement for merchandising and service
organizations.

Assignment Description and Instructions

In this scenario, you are presented with the company’s financial records and are required to use
the principles learned in units 4, 5 and 6 to assist you in presenting the required answers. This is
an individual activity which requires vigilance and a keen eye for details will be crucial as the
information presented will challenge your ability to use good reasoning and critical thinking to
analyze the financial data presented. There should be absolutely no sharing of answers as this
carries a penalty to include forfeiture of marks for the guilty parties if this is identified. This
assignment will be available to you within a thirty-six (36) hours window, and you are
required to prepare and post your answers within this time.

You are required to only use the information/figures in line with your first name initial as
any other info used will result in the loss of marks. For individuals with a double-barrel first
name for example Sue-Ann, use the initial S for the first name as a rule. In such cases the use
of the A initial will be considered as a breach of the rules and result in the forfeiture of the grades
assigned.

All submission should be typed in an excel document and should include a cover page to
show your name, course name/code, table of contents, number of pages, and date. Marks
will be lost if the established rules are not adhered. Each requirement should be type in a
different worksheet within the same excel document. Any other document sued will be
considered as a violation of the rules and result in the forfeiture of the marks allotted to
this assignment.

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 1

The problem to be resolved:
Gregg’s Shipping Supplies Ltd (GSSL) trades in the buying and selling of ship spares and has
several branches within the Caribbean. Recently the company has seen a rapid increase in
demand of its products across all branches and is therefore in need of additional financing to
adequately boost its supply inventory. The corporate banking head of Bankers Choice Bank is
requesting a full set of financial statements to ensure that granting the loan to GSSL would be
financially feasible during a period when many businesses are facing financial challenges. The
company financial year ends on June 30 each year and you have been tasked with the
responsibility to prepare the financial information for the branch that is linked to your first name
initial.

The following are the information of each division/branch along with the first name initial who
are required to prepare the requirements as outlined:

1. St Lucia Branch - students with the first name initial (A, P, I, E, and V).

2. Barbados Branch – students with the first name initial (C, O, R, and Y)

3. Guyana Branch - students with the first name initial (K, Q, M, and F)

4. Trinidad Branch -students with the first name initial (S, W, G, and Z)

5. Jamaica Branch -students with the first name initial (D, T, L, and U)

6. St Kitts Branch -students with the first name initial (N, B, J, X, and H)

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 2

 Gregg’s Shipping Supplies Ltd- St Lucia Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 400,000
Accounts receivable 420,000
Allowance for bad debt 33,000
Merchandise Inventory 1,000,000
Store Supplies 120,000
Prepaid Insurance 115,500
Prepaid rent 177,500
Furniture and fixtures 600,000
Accumulated depreciation-Furniture and Fixtures 118,000
Motor Truck 1,200,000
Accumulated depreciation Motor Truck
Accounts payable 33,000
Salary payable
Interest payable 45,000
Unearned Sales revenue 185,000
Long-term loan 750,000
Gregg's, Capital 1,700,000
Gregg's, Withdrawals 95,000
Sales revenue 3,592,000
Sales discount 102,000
Sales returns and allowances 98,000
Cost of goods sold 850,000
Salaries expense 455,000
Insurance Expense 165,000
Utilities Expense 365,000
Rent Expense 319,500
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 26,500
Bad-Debt Expense
Interest Expense

6,482,500 6,482,500

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 3

The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $98,400.

(ii) Insurance of $115,500 was paid on May 1, 2022, for 7-months to November 2022

(iii) Rent was prepaid on April 1, 2022, for 5-months to August 2022.

(iv)The furniture and fixtures have an estimated useful life of 5 years and is being depreciated on
the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on March 31, 2022, and is being depreciated
over 10 years on the double-declining balance method of depreciation, down to
a residue of $15,000

(vi)Salaries earned by employees not yet paid amounted to $48,000 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $45,000.

(viii) On June 30, 2022, $99,000 of the previously unearned sales revenue had been earned.

(ix)The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $70,000.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,100,000 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $250,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 4

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period ending
June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 5

 Gregg’s Shipping Supplies Ltd- Barbados Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 950,000
Accounts receivable 700,000
Allowance for bad debt 45,000
Merchandise Inventory 1,200,000
Store Supplies 180,000
Prepaid Insurance 132,000
Prepaid rent 248,500
Furniture and fixtures 800,000
Accumulated depreciation-Furniture and Fixtures 79,000
Motor Truck 1,200,000
Accumulated depreciation - Motor Truck
Accounts payable 45,000
Salary payable
Interest payable 33,000
Unearned Sales revenue 455,000
Long-term loan 900,000
Gregg's, Capital 1,700,000
Gregg's, Withdrawals 105,000
Sales revenue 4,902,500
Sales discount 150,000
Sales returns and allowances 105,000
Cost of goods sold 988,000
Salaries expense 605,000
Insurance Expense 148,500
Utilities Expense 405,000
Rent Expense 284,000
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 41,500
Bad-Debt Expense
Interest Expense

8,201,000 8,201,000

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 6

 The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $80,000.

(ii) Insurance of $132,000 was paid on April 1, 2022, for 8-months to November 2022

(iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being
depreciated on the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on May 1, 2022, and is being depreciated
over 5 years on the double-declining balance method of depreciation, down to
a residue of $10,000

(vi) Salaries earned by employees not yet paid amounted to $108,000 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $24,000.

(viii) On June 30, 2022, $85,000 of the previously unearned sales revenue had been earned.

(ix) The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $70,000.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,100,000 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $250,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 7

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period ending
June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 8

 Gregg’s Shipping Supplies Ltd- Guyana Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 950,000
Accounts receivable 865,500
Allowance for bad debt 45,000
Merchandise Inventory 1,150,000
Store Supplies 195,000
Prepaid Insurance 157,500
Prepaid rent 248,500
Furniture and fixtures 600,000
Accumulated depreciation-Furniture and Fixtures 59,000
Motor Truck 1,200,000
Accumulated depreciation - Motor Truck
Accounts payable 50,000
Salary payable
Interest payable 28,000
Unearned Sales revenue 205,000
Long-term loan 950,000
Gregg's, Capital 2,900,000
Gregg's, Withdrawals 125,000
Sales revenue 4,131,900
Sales discount 160,500
Sales returns and allowances 145,400
Cost of goods sold 1,055,000
Salaries expense 808,000
Insurance Expense 157,500
Utilities Expense 325,000
Rent Expense 284,000
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 58,000
Bad-Debt Expense
Interest Expense

8,426,900 8,426,900

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 9

The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $62,000.

(ii) Insurance of $157,500 was paid on April 1, 2022, for 9-months to December 2022

(iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being
depreciated on the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on February 1, 2022, and is being depreciated
over 5 years on the double-declining balance method of depreciation, down to
a residue of $15,000

(vi) Salaries earned by employees not yet paid amounted to $73,800 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $48,300.

(viii) On June 30, 2022, $106,000 of the previously unearned sales revenue had been earned.

(ix) The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $86,550.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,100,000 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $300,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 10

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period

ending June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 11

 Gregg’s Shipping Supplies Ltd- Trinidad Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 1,000,000
Accounts receivable 1,000,000
Allowance for bad debt 80,000
Merchandise Inventory 1,200,000
Store Supplies 205,000
Prepaid Insurance 184,950
Prepaid rent 287,035
Furniture and fixtures 600,000
Accumulated depreciation-Furniture and Fixtures 59,000
Motor Truck 1,200,000
Accumulated depreciation - Motor Truck
Accounts payable 50,000
Salary payable
Interest payable 28,000
Unearned Sales revenue 198,500
Long-term loan 2,185,375
Gregg's, Capital 2,900,000
Gregg's, Withdrawals 125,000
Sales revenue 3,250,000
Sales discount 160,500
Sales returns and allowances 145,400
Cost of goods sold 1,055,000
Salaries expense 808,000
Insurance Expense 184,950
Utilities Expense 325,000
Rent Expense 328,040
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 58,000
Bad-Debt Expense
Interest Expense

8,808,875 8,808,875

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 12

The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $95,400.

(ii) Insurance of $184,950 was paid on April 1, 2022, for 9-months to December 2022

(iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being
depreciated on the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on February 1, 2022, and is being depreciated
over 5 years on the double-declining balance method of depreciation, down to
a residue of $15,000

(vi) Salaries earned by employees not yet paid amounted to $195,000 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $50,550.

(viii) On June 30, 2022, $66,000 of the previously unearned sales revenue had been earned.

(ix) The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $100,000.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,115,500 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $345,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 13

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period

ending June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 14

 Gregg’s Shipping Supplies Ltd- Jamaica Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 1,250,000
Accounts receivable 1,300,000
Allowance for bad debt 100,000
Merchandise Inventory 1,300,000
Store Supplies 300,000
Prepaid Insurance 202,050
Prepaid rent 350,000
Furniture and fixtures 800,000
Accumulated depreciation-Furniture and Fixtures 79,000
Motor Truck 1,200,000
Accumulated depreciation - Motor Truck
Accounts payable 50,000
Salary payable
Interest payable 28,000
Unearned Sales revenue 205,000
Long-term loan 2,500,000
Gregg's, Capital 3,500,000
Gregg's, Withdrawals 125,000
Sales revenue 3,403,000
Sales discount 160,500
Sales returns and allowances 145,400
Cost of goods sold 1,055,000
Salaries expense 808,000
Insurance Expense 202,050
Utilities Expense 325,000
Rent Expense 400,000
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 58,000
Bad-Debt Expense
Interest Expense

9,923,000 9,923,000

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 15

The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $159,500.

(ii) Insurance of $202,050 was paid on April 1, 2022, for 9-months to December 2022

(iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being
depreciated on the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on November 1, 2021, and is being depreciated
over 5 years on the double-declining balance method of depreciation, down to
a residue of $15,000

(vi) Salaries earned by employees not yet paid amounted to $182,500 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $65,000.

(viii) On June 30, 2022, $145,000 of the previously unearned sales revenue had been earned.

(ix) The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $130,000.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,295,500 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $455,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 16

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period

ending June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 17

 Gregg’s Shipping Supplies Ltd- St Kitts Branch
Trial Balance as at June 30, 2022
A/C Name Trial Balance
DR CR
Cash 1,400,000
Accounts receivable 1,400,000
Allowance for bad debt 100,000
Merchandise Inventory 1,400,000
Store Supplies 400,000
Prepaid Insurance 211,500
Prepaid rent 420,000
Furniture and fixtures 1,000,000
Accumulated depreciation-Furniture and Fixtures 99,000
Motor Truck 1,200,000
Accumulated depreciation - Motor Truck
Accounts payable 50,000
Salary payable
Interest payable 28,000
Unearned Sales revenue 205,000
Long-term loan 2,500,000
Gregg's, Capital 3,500,000
Gregg's, Withdrawals 125,000
Sales revenue 4,201,900
Sales discount 160,500
Sales returns and allowances 145,400
Cost of goods sold 1,055,000
Salaries expense 808,000
Insurance Expense 211,500
Utilities Expense 325,000
Rent Expense 480,000
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Motor Truck
Store Supplies Expense
Gain on Disposal of Old Motor Truck 58,000
Bad-Debt Expense
Interest Expense

10,741,900 10,741,900

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 18

The following additional information is available at June 30, 2022:

(i) Store Supplies on hand at June 30, 2022 amounted to $355,000.

(ii) Insurance of $211,500 was paid on April 1, 2022, for 9-months to December 2022

(iii) Rent was prepaid on March 1, 2022, for 7-months to September 2022.

(iv) The furniture and fixtures have an estimated useful life of 10 years and is being
depreciated on the straight-line method down to a residual value of $10,000.

(v) The motor truck was acquired on December 1, 2021, and is being depreciated
over 5 years on the double-declining balance method of depreciation, down to
a residue of $15,000

(vi) Salaries earned by employees not yet paid amounted to $188,000 at June 30, 2022.
(vii) Accrued interest expense as of June 30, 2022, $105,000.

(viii) On June 30, 2022, $185,000 of the previously unearned sales revenue had been earned.

(ix) The aging of the Accounts Receivable schedule at June 30, 2022 indicated that the

Allowance for Bad Debts should be $140,000.

(x) After making all other adjustments, a physical count of inventory was done, which

reveals that there was $1,380,500 worth of inventory on hand at June 30,2022

Other data:

(xi) The business is expected to make principal payments totalling $600,000 towards the

loan during the fiscal year to June 30 ,2023

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 19

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2022.

[Narrations are not required]

b) Prepare the Adjusted Trial balance at June 30, 2022.

c) Prepare the company’s multiple-step income statement for the period

ending June 30, 2022

d) Prepare the company’s statement of owner’s equity at June 30, 2022

e) Prepare the company’s classified balance sheet at June 30, 2022

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 20

 END OF PAPER

ACCT1002 – Introduction to Financial Accounting Assignment # 2 Page | 21