The sixth formers at the Broadway School run a tuck shop business. They began trading on 1 December 20X9 and sell two types of chocolate bar, ‘Break’ and ‘Brunch’.

Their starting capital was a £200 loan from the School Fund.

Transactions are for cash only.

Each Break costs the sixth form 16p and each Brunch costs 12p.

25% is added to the cost to determine the selling price.

Transactions during December are summarised as follows:

(a) Record the above transactions in the cash, purchases and sales accounts. All calculations must be shown.

(b) On 20 December (the final day of term) a physical stocktaking showed 34 Break and 15 Brunch in stock. Using these figures calculate the value of the closing stock, and enter the amount in the stock account.

(c) Prepare a trading account for the tuck shop, calculating the gross profit/loss for the month of December 20X9.

(d) Calculate the number of each item that should have been in stock. Explain why this information should be a cause for concern.

Transcribed Image Text:

December 6 Bought 5 boxes, each containing 48 bars, of Break; and 3 boxes, each containing 36 bars of Brunch. December 20 The month's sales amounted to 200 Breaks and 90 Brunches.