The following transactions relate to Toy Manufacturers Company during the month of June.
|
Date
|
Business transactions
|
£
|
|
June
|
1
|
Purchase toy components from supplier, 100 items at £3 each, paying in cash, and place in raw materials store.
|
300
|
|
June
|
3
|
Remove 70 components from raw materials store to meet production department's request (cost £3 each).
|
210
|
|
June
|
5
|
Carry out labour work and use production facilities to convert components into finished goods. Additional costs incurred for labour and use of facilities were £2.50 per toy processed.
|
175
|
|
June
|
6
|
Finished goods are transferred to finished goods store. Each toy has cost £5.50 in total (70 toys ´ £5.50 = £385).
|
385
|
|
June
|
11
|
50 toys, which cost £5.50 each to manufacture, are delivered to a customer.
|
275
|
|
June
|
14
|
The customer pays a price of £8 cash per toy immediately on delivery.
|
400
|
(a) Calculate the profit on sale.
(b) Explain the effect of each transaction on the accounting equation.
(c) Prepare a spreadsheet summarising the transactions.