QUESTION 2(10 marks)

Hitech has commenced a business supplying IPads to State Schools. All purchases and sales of IPads are on credit. Hitech uses a perpetual inventory recording system.

Transactions

June 1st 2021 Purchase the first 200 IPads at $240 each and paid freight of $200.

June 2ndSold 100 IPads at $600 each - this sales price will remain constant for the accounting period.

June 3rdCustomer returned 10 IPads.

June 3rdPurchased 100 IPads at $252 each and paid freight of $200.

June 4thSold 70 IPads.

June 5thSold 25 IPads.

June 6thPurchased 100 IPads at $255 each, paid freight of $200.

June 7thThe stock-take revealed 210 IPads suitable for sale.

Required:

1. Prepare General Journal entries to record the transactions,using First in First out for stock movements and if necessary show the entry for any stock loss or gain for the period. (No narration required).
2. Prepare an extract of Income Statement up to the gross profit stage, based on a Perpetual Inventory System for the period ended June 7th 2021, usingFirst-In-First Outfor the movement of stock.

The Stock Cardis available for your use - it will not be marked