Question 3 (ZanZan Traders) 21 Marks ZanZan Traders is based in Cape Town and sells self-beaded sneakers. The company adds a 60% markup on cost to determine the selling price and uses a perpetual inventory recording system. The following transactions took place during the year ended 30 June 2020, ignore any VAT implications. Transaction 1: On 10 June 2020, the company sent 120 pairs of sneakers on consignment to ShoeShoes Store in Durban and paid R3 000 to transport the sneakers. The consignment agreement states that ShoeShoes would sell the sneakers for the normal price of R300 each, and would send the sales amount earned each month to ZanZan Traders on the 15th of the following month, after deducting a 10% commission. ShoeShoes informed that they had sold 100 pairs of sneakers by the end of 30 June 2020. Transaction 2: ZanZan Traders has received a special order for 200 pairs of sneakers. For this order only, ZanZan will follow the following process in beading each pair of sneakers: Plain (unbeaded) sneakers are bought from Sneakers Warehouse based in Johannesburg for R100 each. Since ZanZan Traders bought in bulk, a trade discount of 2% was offered on each pair of sneakers. ZanZan pays transport costs of R1 000 to transport 100 pairs of sneakers to Cape Town. The beads used on each pair of sneakers costs ZanZan R15 and labour workers are hired to bead the sneakers. The workers are paid R20 to bead one pair of sneakers. Each pair of sneakers will be packaged in a special wrapping costing R10 for each pair. ZanZan Traders will pay a delivery cost to the customer of R25 for each pair of sneakers. Required: Refer to transaction 1: (a) Prepare the journal entry recorded by ZanZan Traders on 10 June 2020. (Narrations are required) 3 marks (b) Prepare the journal entry recorded by ShoeShoes for the sale of the 100 pairs of sneakers. (Dates are required but not narattions) 3 marks (c) Prepare the journal entry recorded by ZanZan Traders for the sale of the 100 pairs of sneakers in Durban. (Dates are required but not narattions) 6 marks Refer to transaction 2: (a) Calculate the total cost of sneakers for ZanZan Traders that would be reflected in their inventory balance for the special order. 7 marks (b) Briefly justify why you have or have not included the various cost items indicated in transaction 2 in the cost of inventory calculated in (a) above. 2 marks