P&R Traders uses the periodic inventory system to account for inventory. These balances appeared in the trial balance as at 1 January 20x7:

Additional information:

1 On 30 June, a fire destroyed most of the inventory on hand. R3 100 of the inventory was salvaged from the fire.

2 Sales for the year ended 31 December 20x7 were R32 000.

3 The business marks up its inventory at 20% on cost.

4 Purchases up to 30 June 20x7 were R20 000, and for the next 6 months’ purchases were R15 000.

5 Sales for each month was R2 500, except for June when an increase in sales happened because of an excellent advertising campaign.

6 On 31 December, closing inventory was R12 300.

You are required to:

1. Calculate the inventory loss on 30 June 20x7.

2. Calculate the gross profit for the year ended 31 December 20x7

Transcribed Image Text:

Inventory Accounts receivable. Accounts payable Capital Bank Drawings Vehicles 4 000 00 14 000 00 7 000 00 22 000 00 5 200 00 800 00 5 000 00