Luthuli Electronics Ltd. commenced business on 1 April 1999, selling television

Luthuli Electronics Ltd. commenced business on 1 April 1999, selling television sets both on a cash basis and by instalments. Hire purchase sales require a deposit of one-third of the cash selling price with the balance payable in 18 equal monthly instalments. No additional charge is made for this service. At the end of each financial year the firm takes credit for the profit instalment sales only in respect of the proportion represented by deposit and instalments actually reserved.The following transactions took place during the two yeas ended 31 March 2000 and 2001:2000Shs.2001Shs.Cash salesInstalment salesNew TV sets purchasedCash collections or instalment contracts:Initial depositMonthly instalments 2000 sales 2001 salesStocks at 31 March:New TV sets at cost9,606,60084,893,40069,300,000Shs.28,297,80019,323,90016,380,00013,131,000119,394,00075,119,700Shs.39,798,00027,623,70025,182,00021,604,500Required:(i) Trading accounts in respect of cash sales for each of the years ended 31 March 2000 and 31 March 2001 respectively. (ii) Show the gross profit on hire purchase sales for each of the years ended 31 March 2000 and 31 March 2001.


 

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