Sports watches manufactured: Inventories as at 30 June: Raw materials (cost price) Work in progress (cost price) Note 1

2022

2023 RR 12 000 21 600 65 000

Note 1 Work in progress of Timely (Pty) Ltd has not been finalised for the June 2023 financial year-end. The production records indicate that 30% of the current years allocated production expenditure and materials used relate to sports watches that were still under production at the year-end. The demand for the latest watches is very high, and all manufactured watches are sold immediately once produced. Therefore, there are no manufactured watches finished goods on hand at year end. There were no raw material spillages during the year. Timely (Pty) Ltd values raw materials, work in progress and finished goods on a first- in-out basis (FIFO). Sports watches distributed to outlets for resale: New and second-hand sports watches are distributed to outlets for resale. The information below relates to watches that have been traded in and are now distributed to outlets for resale: Watch serial number Date purchased Purchase price R Date of sale Estimated selling price 30 June 2023 R SW001 31 May 2021 SW002 15 March 2021 SW003 28 June 2021 SW004 9 September 2022 SW005 22 February 2023 11 000 6 900 10 000 13 000 14 000 - 13 May 2022 - 13 October 2023 - 9 500 8 500 12 000 15 000 16 500 Sports watches on hand at 1 July 2022 were SW001, SW002 and SW003. There are no manufactured watches included in opening inventory. The net realisable value for opening inventory has remained unchanged from the previous year-end. Sales staff earn a commission of 8% of the selling price. REQUIRED: Prepare the general journal entries required in the records of Timely (Pty) Ltd to recognise the cost of sales for the year ended 30 June 2023. Journal dates and nar- rations are not required. 27 marks