Refer to the following information and answer the following questions

Prancing Horse Ltd is a company that imports and sells desktop clocks. The company has an FOB shipping point agreement with their supplier Enzo Ltd. On 1 January 2010 Prancing Horse Ltd has 17 clocks at a recorded cost of R4 250. The company uses the periodic inventory system of recording transactions relating to inventory and uses a FIFO valuation basis. Transactions for the 3 months ended 31 March 2010 are as follows:

1.The company received 8 clocks at R260 each on 13 January 2010. These clocks had been purchased on credit.

2.The order of 13 January 2010 incurred freight charges of R32 and customs duty R20.These were paid in cash. The freight and customs are charged on the whole consignment.

3.Sold 9 clocks on 31 January 2010 for R300 each on credit.

4.Purchased 10 clocks on 10 February 2010 at R275 each. Prancing Horse Ltd is entitled to a 10% prompt settlement discount. Based on past experience it is probable that

Prancing Horse Ltd will pay the creditor within the settlement period for this particular consignment. The company incurred R30 on packaging costs for this delivery,

plus R50 freight charges and customs duty of R25. The packaging, freight and customs duty are charged on the whole consignment.

5. Sold 15 clocks for R320 each for cash on 2 March 2010.

4.1 Prepare the journal entries for the transactions in points 1-3 above in the General Journal of Prancing Horse Ltd. (10 marks)

4.2 Calculate the cost per unit of the consignment purchased on 13 January (points 1 and 2) and the consignment purchased on 10 February (point 4) (15marks)