Seeta runs a food store but does not keep a full set of accounting records. Her gross profit margin is 20 percent. All takings are banked at the end of the day. Seeta believes that some cash was stolen from the till by her assistant on 31 October 2014 when Seeta was at the wholesalers.

She can provide the following details.

Calculate the amount of cash missing from the till by using the following procedure:

a. Prepare the total payables account to find credit purchases for the year.

b. Prepare the trading section of the income statement for the year ended 31 October 2014 to find the correct figure for total sales.

c. Compare this sales figure with the figure given in the question to calculate the missing cash.

Transcribed Image Text:

Cash paid to suppliers 42 200 Inventory at 1 November 20 13 14 600 Inventory at 31 October 2014 13 400 Sales 50 600 Trade payables at 1 November 2013 9 200 Trade payables at 31 October 2014 8 400