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Question 1 The following transactions relate to the businesses of L. Lakemba and F. Fairlight....

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Question

Accounting

Question 1

The following transactions relate to the businesses of L. Lakemba and F. Fairlight.

June

7

14

15

26

Lakemba sold goods to Fairlight for $3400. Terms were 2/10, n/30.

Fairlight paid Lakemba the net amount due.

Lakemba sold goods to Fairlight for $2470. Terms were 2/10, n/30.

Fairlight paid for the goods.

Required

Prepare general journal entries to record the above transactions (a) for L. Lakemba and (b) for F. Fairlight. Both companies use a periodic inventory system. (Assume neither is registered for GST.)

Question 2

Use the following information from the records of Preston Partners to prepare an income statement under the periodic inventory system for the year ended 30 June 2017.

Purchases

Inventory, 1 July 2016

Inventory, 30 June 2017

Selling and distribution expenses

Sales

Purchases returns and allowances

Sales returns and allowances

Administrative expenses

Freight inwards

Finance expenses

$

186 600

13 860

12 920

45 420

268 860

4 420

6 220

16 460

3 180

2 020

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