In its mission to simplify student life, Pep Mart has been working on a "Brain Charge Pillow", allowing students to absorb study material during sleep. Recently, they discovered a similar device patented by an American company, Seeple. The iDream product made Pep Mart reconsider its development efforts, and it has now decided to sell the seeple product instead.

To market iDream, Pep Mart has leased an additional storefront in Brisbane for 12 months, starting 1 May 202x. Rent, at $4,000 monthly, must be prepaid in full for the contract duration on 1 May.

Simultaneously, Pep Mart has hired a University student, Rose Dawson, to manage an iDream fan site on Facebook. Rose will work three hours daily (all week), beginning 1 May. Her wage is $30 per hour, to be paid on 5 June for her May work.

The new store's furniture, including a large bed for testing iDream, is designed in Shanghai and made in Melbourne. The bed was delivered on 1 June, with a $50,000 invoice from the Melbourne manufacturer and a $10,000 invoice from the Shanghai designers. Pep Mart's sales director approved the bed's final design during a business trip to Melbourne. The directors trip, costing $2,500 (including an additional taxi fare to the manufacturer), is payable on 15 July.

On 1 June, Pep Mart ordered 30 iDream units from Seeple at $800 each, paid on 20 June.

The subsequent transactions occur:

• University buys 10 iDream units for the library at $1,500 per unit on credit on 10 June, paying on 15 June after a 10% early payment discount.
• On 17 June, University returns two damaged iDream units. Pep Mart updates University's invoice and destroys the damaged units.
• On 18 June, Pep Mart orders another 60 iDream units from seeple at a special price of $650 each. Payment is made two days later.
• On 20 June, James College purchases 10 iDream units from Pep Mart for $1,600 per unit, making the payment on the same day. Large Mart offers a 5% trade discount to James College for this transaction.

On 1 July 202x, Pep Mart leases a company car for the service department of the new store (called the Britt Herd). The duration of the lease is 5 years, and the car has an expected useful life of 8 years. The lease contract requires Pep Mart to pay $10,000 (via bank transfer) on 30 June of each year during the lease period. The lease contract states that Pep Mart may cancel the lease once the contract is signed, but that Pep Mart will have to pay a fee of transaction fee of $100 of the lease is cancelled prior to the end of the contract. At the end of the lease period, Pep Mart will be able to purchase the car for a payment of $10,000. It is expected that the car has a fair value of $5,000 at the time Pep Mart is able to exercise the purchase option. The interest rate in the lease is 12%. Large Mart decided to enter into the lease agreement instead of purchasing the car because the purchase price would have been $41,000 and Large Mart did not have sufficient cash resources to make such a purchase at that time.