E9-1

Jody Jools opened an on-line business, Rare Editions, buying and selling rare Africana

books on 1 April 20X7.

One of Jody's close friends helped her to design and set-up a webpage for Rare Books. As

interest in and demand for rare Africana books had recently increased, Jody's business did

well from its first week of operation, with sales surpassing her expectations. At 30 April

from 20X7, a she deceased had only estate. 5 books on

hand, each of which had cost her C750 when purchased

On 1 May 20X7, Jody purchased a further parcel of 40 books for C750 each from the

deceased estate

Jody applied a mark-up of 100% on cost and advertised the books for sale at C1 500 each.

Between 1 May 20X7 and 31 May 20X7, she sold 24 books.

Jody uses the periodic inventory system and a physical stock count indicated that she had

21 books on hand at 31 May 20X7.

Part A

You are required to:

a. Prepare the journal entries in the accounting records of Rare Editions to record

transactions for May 20X7

b . Prepare the closing entries at 31 May 20X7

Part B

Jody uses the perpetual inventory system and a physical stock count confirmed that she

had 21 books on hand at 31 May 20X7.

You are required to:

a. Prepare the journal entries in the accounting records of Rare Editions to record the

transactions for May 20X7.

b. Prepare the closing entries at 31 May 20X7