Jodie is a wholesaler of electrical discount goods. She buys in end-of-line and seconds quality stock from manufacturers and sells it on to small electrical retailers. She has to take advantage immediately of any special offers that manufacturers make available; if she does not the manufacturers will sell to one of her competitors. Therefore, her stock levels can fluctuate substantially from one week to the next. The level of sales is not steady from month to month; it depends upon what is in stock and whether there is much demand for the Items Jodie currently has in her warehouse. At the beginning of March Jodie’s stock is valued at £93 882 and comprises principally kettles, toasters and dishwashers. An unexpected surge in demand by small retail wholesalers for these items results in a high level of sales in March of £89 907. By the end of March stock has dropped to £34 920. At the end of April, as the result of a special purchase of electric blankets it has gone up to £82 860 dropping back only slightly to £75 918 at the end of May. Jodie knows that she will find it difficult to dispose of most of this stock before the end of the summer. Sales for April are £31 241 and for May, £40 270. Purchases for each of the three months are: March £3074; April £65 747; and May £18 911.

a) | Draw up trading accounts for each of the three months.

b) Discuss the business and financial problems Jodie would encounter in running this type of wholesaler operation.