Erica Winters is the new manager of ‘The Perfect Bed’ a retail business specialising in beds and bedroom suites. She concerned about the end-of-year physical stocktake and ‘cut-off’ procedures.

Erica discovered a discrepancy between the balance of the inventory control account on 30 June 2024 which amounted to \($77\) 200 and the physical stocktake which amounted to \($73\) 400. Concerned that this discrepancy would reflect badly on her as a new manager, Erica reviewed the inventory and physical stocktake records. Firstly she confirmed that the net realisable value for each inventory item held for sale exceeded the cost price of the item. Knowing transactions with EXW and DDP fell into the ‘do we include or exclude from the physical stocktake’ he scrutinised inventory and sales purchases close to the end of the month. Erica discovered the following issues:

1. Goods costing \($1200\) were sold on credit to Mr & Mrs Fullham for \($2250\) on 28 June 2024 on DDP terms. Erica recorded the sale when it occurred on 28 June and proceeded to arrange for shipping to the customer. The goods left the business premises on 29 June but would not arrive at the customer’s house until 2 July. The goods were not included in the physical stocktake as they were no longer on the business premises at 30 June.

2. Erica included \($2300\) of goods held on consignment in the physical stocktake.

3. Goods costing \($1365\) were purchased on credit from Sleepy's Ltd on 26 June 2024 and received on 28 June 2024. The purchase was unrecorded at 30 June 2024 as Erica was waiting on the invoice to record in the accounting system, but the goods were included in the physical stocktake as they were sitting in the warehouse.

4. Goods costing \($600\) were purchased on credit from Klassic Bedding on 23 June 2024 on EXW shipping terms. The goods were delivered to the transport company on 27 June 2024. The purchase was recorded on 27 June 2024 but, as the goods had not yet arrived, Erica did not include these goods in the physical stocktake.

5. At 30 June 2024, Erica had unsold goods costing \($3500\) out on consignment. These goods were not included in the physical stocktake.

6. Goods costing \($3150\) were sold on credit to Willows Retirement Village for \($5700\) on 24 June 2024 on EXW shipping terms. The goods were shipped on 28 June 2024. The sale was unrecorded at 30 June 2024 and Erica did not include these goods in the physical stocktake.

Required

(a) Prepare any journal entries necessary on 30 June 2024 to correct any errors and to adjust inventory. Ignore GST.