Answered: Mary has a general dealer business and…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 2MC: The following items were included in Venicio Corporations inventory account on December 31, 2019:...

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Mary has a general dealer business and uses the periodic inventory system
to keep records of buying and selling goods. The following information was
extracted from the accounting records for financial year ended 30 June 2020.

1. Trading inventory at 30 June 2021 was taken and valued at R203 400.
2. Neil took inventory worth R18 100 for his personal use. This has not been
recorded in the above accounting records.
3. Insurance on goods transported from suppliers for R7 400 is also not yet included
in the above information.

Required:
Prepare only the trading section of the Statement of profit or loss and other
comprehensive income for Mary’s General Dealers for the year ended
30 June 2021.

List of selected accounts at 30 June 2021
R
Trading inventory : 1 July 2020
225 000
Purchases
916 400
Sales
1 668 800
Purchases returns
17 300
Sales returns
20 700
Settlement discounts received
Settlement discounts granted
32 600
17 900
Transport inwards (from suppliers)
45 200
Transport outwards (to customers)
23 100

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