Relevant opening balances at 1 July 2022 were:

inventory $80 000 DR

The following transactions relate to inventory for the year ended 30 June 2023

1. Purchased cables totaling $230 000 after trade discount on credit. Transport inward for these goods of $7200 was paid in cash

2. Made cash sales of $ 180,000 and credit sales of $ 87,500. The cost of goods sold was $187 250

3. Some of the stock purchased during the year was damaged upon delivery. The cables were returned to the supplier who agreed to cancel $ 5,500 of the original purchase.

4. Paid cash totaling $150 000 to suppliers having received a discount totaling $8000 for prompt payment

5. Credit customer returned cable with a selling price of $6500 and these were returned to stock. The cost of goods returned was $4500

6. Received cash totaling $56000 from trade debtors having given a discount of $2000 for prompt payment

7. After trading finished on 30 June 2023, a stocktake showed that the cost of unsold stock on hand was $119250

a) Prepare general journal entries to record the above transactions. show the calculations if it involve

b) Calculate the inventory shortage expense for 2023 and prepare the associated journal entry.

Answer rating: 100% (QA)

a General Journal Entries 1 Purchased Cables Debit Inventory 230000 Credit Accounts Payable 230000 2 ... View the full answer