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 300 in cash, and place in raw materials store.

June 3 Remove 70 components from raw materials store to meet production 210 department’s request (cost £3 each).

June 5 Carry out labour work and use production facilities to convert 175 components into finished goods. Additional costs incurred for labour and use of facilities were £2.50 per toy processed.

June 6 Finished goods are transferred to finished goods store. Each toy has 385 cost £5.50 in total (70 toys × £5.50 = £385).

June 11 50 toys, which cost £5.50 each to manufacture, are delivered to a 275 customer.

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.

AppendixLO1