Timely (Pty) Ltd is a sports watch manufacturer and distributor. Timely (Pty) Ltd distributes new sports watches as well as second-hand sports watches that customers trade in for later versions. The company has a 30 June year-end. Below is an extract from the trial balance of Timely (Pty) Ltd for the 30 June 2023 yearend which the entity is in the process of finalising. R Sales 5 725 000 Purchases raw materials (components) 875 000 Purchases second-hand watches 277 347 Labour costs hourly paid employees Factory staff 210 000 Administration and selling staff 180 000 Salaries and commissions Factory staff 110 000 Administrative and sales staff 240 000 Depreciation plant and machinery 40 000 Depreciation office equipment 5 655 Interest paid 9 817 Interest received 10 487 Dividends received 5 000 Other expenses 87 900 Retained earnings as at 1 July 2022 230 000 Normal capacity at the factory of Timely (Pty) Ltd is 12 000 sports watches per year. Recent power outages have negatively affected the production at Timely (Pty) Ltds factory, reducing the actual production for the year to 85% of normal production levels. ANNEXURE I: FORMATIVE ASSESSMENT 2 94 HFAC231-1-Jan-June2023-FA2-TD-V2-15122022 Sports watches manufactured: Inventories as at 30 June: 2022 2023 R R Raw materials (cost price) 12 000 21 600 Work in progress (cost price) 65 000 Note 1 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 11 000 - 9 500 SW002 15 March 2021 6 900 13 May 2022 8 500 SW003 28 June 2021 10 000 - 12 000 SW004 9 September 2022 13 000 13 October 2023 15 000 SW005 22 February 2023 14 000 - 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 realizable 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 recognize the cost of sales for the year ended 30 June 2023. Journal dates and narrations are not required. (27 marks) Note: All amounts should be rounded to the nearest Rand. Show all calculations clearly. Your answer must comply with International Financial Reporting Standards (IFRS). Competency Framework Reference: B1.2 Accounting information systems a) Maintain an accounting information system that is manual, automated or a combination of both. D1.1 Financial reporting: in accordance with International Financial Reporting Standards (IFRS) a) Prepare, analyse, and evaluate general purpose financial statements in accordance with IFRS for an entity, which could be a for-profit entity, an SME, a public sector entity or a not-for-profit entity.