Heaven Scent is a retail business selling handmade soaps, essential oils, candles and lotions. The manager is required to prepare quarterly financial reports to the owner of the business. To assist with this process, and to save having to perform a physical stocktake every quarter, the business uses the retail inventory method for interim reporting purposes. Normal mark-up on cost is 55%. Ignore GST.

Required

(a) The manager requires an estimate be made of inventory on hand at cost for the quarter ending 31 March 2022. Assist the manager by providing this estimate.

(b) Prepare a Statement of Profit or Loss up to gross profit to assist the manager with preparing the quarterly financial reports.

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Beginning inventory (cost) Net purchases (cost) Sales Mark-downs (some items still in stock) Mark-downs cancellations (some items still in stock) Additional mark-ups (some items still affected still in stock) Staff discounts (on items sold) $ 45 000 75 000 110 000 6 750 900 1950 3 750