A6.3 [S] The following transactions relate to Toy Manufacturers Company during the month of June.

a) Calculate the profit on sale.

(b) Explain the effect of each transaction on the accounting equation.

(c) Prepare a spreadsheet summarising the transactions.

Transcribed Image Text:

Date June 1 Business transactions 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 x 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