Stevens Ltd is the leading retailer of Gym equipment. The following information occurred during May 2020. Stevens Ltd had an opening inventory balance of $8,400,000.May1 – Returned to the suppliers $80,000 of the opening inventory and received cash.12 – Purchased additional inventory on credit from the supplier for $12,000,000.18 – Sold inventory for $6,000,000 cash (Cost price to Stevens Ltd $2,400,000).19 – Paid the suppliers the account from 12 May.31 – The closing stocktake at year-end revealed an inventory balance of $17,800,000.[Fill in the blank] Part 1A Record the above information for the month of May 2020 in the general journal using the perpetual inventory method. Narrations are not required. Ignore GST. Journal Template: [table] Date | Account Name | Dr ($) | Cr ($) - | - | - | - - | - | - | - - | - | - | - - | - | - | - - | - | - | - - | - | - | - - | - | - | - - | - | - | - - | - | - | - [/table][Fill in the blank] Part 1B Present the Income Statement extract for Stevens Ltd using the periodic inventory method for the month ended 31 May 2020.[Fill in the blank] Part 1C Briefly explain two advantages of the perpetual inventory method for Stevens Ltd.[Fill in the blank]

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The question presents a set of May 2020 inventory transactions for Stevens Ltd and asks you to fill in journals, prepare an income statement under the periodic method, and explain two advantages of the perpetual method. I will analyze each provided entry/statement option in order, explaining why it is correct or incorrect, and then discuss the periodic-income-statement items and the proposed advantages. May 1 entries: - Option: 'May 1 | Accounts Payable | Dr 80,000 | Inventory | Cr 80,000' - Analysis: When you return goods to suppliers, you reduce both the Inventory and the Accounts Payable balances. In a perpetual system, the entry to record a purchase return is a credit to Inventory and a debit to Accounts Payable. The given entry debits Accounts Payable and credits Inventory, which matches the required direction (decrease in payable with a corresponding decrease in inventory). This is correct in terms of the effect; the usual format would be Dr Accounts Payable 80,000 and Cr Inventory 80,000, which aligns with the option’s amounts and accounts. May 12 entries: - Option: 'May 12 | Invent......Login to view full explanation

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