Crane Traders is a wholesaler of fishing rods operating at Forster on the NSW north coast. The company buys fishing rods for $250 each and sells them for $310 each. On the 1^st August the company had 190 fishing rods in its store.

During August 2021 the following transactions took place:

August 3^rd Purchased 100 fishing rods from Reels Express, terms 5/10, n/30

August 4^th Paid $140 freight on the fishing rods purchased from Reels express on August 3^rd.

August 11^th Sold 150 fishing rods on account, terms 5/10, n/30

August 14^th Sold 80 fishing rods for cash.

August 16^th Returned 15 fishing rods purchased last month to Reels Express as they were damaged.

August 18^th A customer returned 20 of the fishing rods sold on August 11^th and paid for the remaining fishing rods sold.

August 24^th Paid for the fishing rods purchased on August 3^rd.

At the end of August, a physical count of inventory revealed that the business had 65 fishing rods in its store.

Required:

a) Prepare the journal entries to record each of the above transactions in the accounting records of Crane Traders assuming that the periodic inventory system is used (9 marks)

Ignore GST. (No narrations are required)

b) Discuss the importance of performing a stocktake at the end of the accounting period for the periodic inventory system (1 mark) Word limit: maximum 50 words