The following transactions relate to Computer Assembler Company during the month of May.

Required:

(a) Calculate the profit on sale.

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

(c) Make entries in a spreadsheet summarising the transactions.

Use the following spreadsheet for analysing transactions and events into elements of the accounting equation.

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May 1 3 5 6 11 11 Purchase computer components from supplier, 2,000 items at 50 each on credit and place in raw materials store. Remove 1,500 components from the raw materials store to meet production department's request (cost 50 each). Each computer requires 3 components. Carry out labour work and use production facilities to convert components into finished goods. Additional costs incurred for labour and use of facilities were 75 per computer assembled. Finished goods are transferred to finished goods store. Each computer costs 225 in total (500 computers 225 = 112,500). 300 computers that cost 225 each to manufacture are delivered to a customer. The customer buys on credit terms at a price of 400 for each computer delivered. 000's 100 75 37.5 112.5 67.5 120