How does the timing in the recording of purchases and sales affect Safety International Ltd's profitability?

ACCY112: Accounting In Organisations Spring 2017- School of Accounting, Economics and Finance Case study Two Safety International Ltd, a merchandising company was established in 2010, buying and selling vehicle airbags and airbags for baby's car seats. The products are sold all over the world, but mainly in Australia, New Zealand and the United States of America. Last year at the end of the financial year, 30 June 2016 board of directors' meeting, questions were raised about the safety of vehicle airbags, as concerns had been raised by their customers in Australia and New Zealand. As the vehicle airbags are the main source of revenue for the company, management was concerned about the future of this business being in jeopardy. The company hired a new staff member, Steven, who has expertise in the area of airbags' safety to advise management of the required changes to their products. The modifications advised by Steven would increase the cost of sales, but also increase sales revenue at the same time. The chief accountant, Larry Wilson, assured the board of directors that by the end of financial year, 30 June 2017, the net profit would increase by more than 20%. However, by the end of June 2017, Larry was notified that the company's profit forecast was not achievable. While Larry was concerned with the news, he suspected that the issue was mainly with how the inventory stocktake was calculated. He knew that a new junior accountant, Sally Gibbs, was employed during 2017 and was mainly in charge of completing a physical inventory count. After talking to Sally, Larry found out that she had only counted and costed the items that were physically available in the company's warehouse and storage including the vehicle airbags that were on the shelves, in the receiving area, as well as the docking area, and not considering the vehicle airbags in transit. As the matter was important, Larry asked some of the other accountants to perform an audit of the inventory count. Larry asked them to go through the invoices received from purchases and receipts prepared for sales and figure out the number and cost of inventory sold and on hand for the year ended 30 June 2017