Q1. Prepare the journal entries to record the following transactions in Simon Ltds records using a perpetual inventory system. (a) On 2 March Simon Ltd sold $450 000 of inventory to Finkle Ltd, terms 2/7, n/30. The cost of the inventory sold was $300 000. (b) On 6 March Finkle Ltd returned $65 000 of the inventory purchased on 2 March because it was incorrect. The cost of the inventory returned was $40 000. (c) On 8 March Simon Ltd received the balance due from Finkle Ltd.

Q2. The trial balance of Francine Pty Ltd at the end of its nancial year, 30 June 2016, includes these accounts: Beginning Inventory $56 760; Purchases $469 920; Sales $627 000; Sales Returns and Allowances $9900; Freight-out $3300; Purchase Returns and Allowances $6600. The ending inventory is $85 800.

Prepare the cost of sales section of the statement of pro t or loss for the year ending 30 June 2016.