Answer one question from this section. 1. Visionary Toys (VT) Visionary Toys (VT) produces highly innovative toys for children. VT began operation in January 2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D printer. VT uses the reducing balance method of depreciation. 3D technology changes rapidly and the financial directors are also considering ways of reducing VT's tax liabilities in 2018. The financial director presented financial information for VT at the end of 2017. Table 1: Revenue and expense information for the year 2017 and balance sheet items at 31 December 2017 Cash $1000 Net fixed assets $27 000 Interest paid $250 Creditors $4000 Debtors $3500 Accumulated retained profit end of 2017 $10000 Costs of goods sold $7500 Sales revenue $27 250 Short-term loans $1500 Overdraft balance $2000 $7000 Expenses Share capital Dividends paid Long-term liabilities Stock of toy parts $13500 $2500 $5000 $4500 [Source: © International Baccalaureate Organization 2018] (a) Define the term unique selling point/proposition (USP). (b) (i) Construct a fully labelled balance sheet for VT for the end of 2017. (ii) Calculate the acid test (quick) ratio for VT for 2018. (c) Explain one reason for VT to use the reducing balance method of depreciation.
Answer one question from this section. 1. Visionary Toys (VT) Visionary Toys (VT) produces highly innovative toys for children. VT began operation in January 2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D printer. VT uses the reducing balance method of depreciation. 3D technology changes rapidly and the financial directors are also considering ways of reducing VT's tax liabilities in 2018. The financial director presented financial information for VT at the end of 2017. Table 1: Revenue and expense information for the year 2017 and balance sheet items at 31 December 2017 Cash $1000 Net fixed assets $27 000 Interest paid $250 Creditors $4000 Debtors $3500 Accumulated retained profit end of 2017 $10000 Costs of goods sold $7500 Sales revenue $27 250 Short-term loans $1500 Overdraft balance $2000 $7000 Expenses Share capital Dividends paid Long-term liabilities Stock of toy parts $13500 $2500 $5000 $4500 [Source: © International Baccalaureate Organization 2018] (a) Define the term unique selling point/proposition (USP). (b) (i) Construct a fully labelled balance sheet for VT for the end of 2017. (ii) Calculate the acid test (quick) ratio for VT for 2018. (c) Explain one reason for VT to use the reducing balance method of depreciation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Answer one question from this section.
1. Visionary Toys (VT)
Visionary Toys (VT) produces highly innovative toys for children. VT began operation in
January 2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D
printer. VT uses the reducing balance method of depreciation. 3D technology changes rapidly
and the financial directors are also considering ways of reducing VT's tax liabilities in 2018.
The financial director presented financial information for VT at the end of 2017.
Table 1: Revenue and expense information for the year 2017 and balance sheet items at
31 December 2017
Cash
$1000
Net fixed assets
$27 000
Interest paid
$250
Creditors
$4000
$3500
Debtors
Accumulated retained profit
end of 2017
$10000
Costs of goods sold
$7500
Sales revenue
$27 250
Short-term loans
$1500
Overdraft balance
$2000
$7000
Expenses
Share capital
Dividends paid
$13500
$2500
Long-term liabilities
Stock of toy parts
$5000
$4500
[Source: © International Baccalaureate Organization 2018]
(a) Define the term unique selling point/proposition (USP).
(b) (i) Construct a fully labelled balance sheet for VT for the end of 2017.
(ii) Calculate the acid test (quick) ratio for VT for 2018.
(c) Explain one reason for VT to use the reducing balance method of depreciation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87351664-192b-44e9-8681-fefec31a9dea%2F9e847ab9-d37e-4bea-948e-cde959693b88%2Fpnv3q9n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Answer one question from this section.
1. Visionary Toys (VT)
Visionary Toys (VT) produces highly innovative toys for children. VT began operation in
January 2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D
printer. VT uses the reducing balance method of depreciation. 3D technology changes rapidly
and the financial directors are also considering ways of reducing VT's tax liabilities in 2018.
The financial director presented financial information for VT at the end of 2017.
Table 1: Revenue and expense information for the year 2017 and balance sheet items at
31 December 2017
Cash
$1000
Net fixed assets
$27 000
Interest paid
$250
Creditors
$4000
$3500
Debtors
Accumulated retained profit
end of 2017
$10000
Costs of goods sold
$7500
Sales revenue
$27 250
Short-term loans
$1500
Overdraft balance
$2000
$7000
Expenses
Share capital
Dividends paid
$13500
$2500
Long-term liabilities
Stock of toy parts
$5000
$4500
[Source: © International Baccalaureate Organization 2018]
(a) Define the term unique selling point/proposition (USP).
(b) (i) Construct a fully labelled balance sheet for VT for the end of 2017.
(ii) Calculate the acid test (quick) ratio for VT for 2018.
(c) Explain one reason for VT to use the reducing balance method of depreciation.
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