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.

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