The following transactions relate to Toy Manufacturers Company during the month of June.

(a) Calculate the profit on sale.
(b) Explain the effect of each transaction on the accounting equation.
(c) Prepare a spreadsheet summarising the transactions.

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Date June 1 June 3 June 5 June 6 June 11 June 14 Business transactions Purchase toy components from supplier, 100 items at 3 each, paying in cash, and place in raw materials store. Remove 70 components from raw materials store to meet production department's request (cost 3 each). Carry out labour work and use production facilities to convert components into finished goods. Additional costs incurred for labour and use of facilities were 2.50 per toy processed. Finished goods are transferred to finished goods store. Each toy has cost 5.50 in total (70 toys x 5.50 = 385). 50 toys, which cost 5.50 each to manufacture, are delivered to a customer. The customer pays a price of 8 cash per toy immediately on delivery. 300 210 175 385 275 400