Incomplete records require markup for gross profit and adjustment for prepaid expenses, but closing inventory is missing for purchases Steps: - Calculate gross profit using 25% markup on cost (equivalent to 20% gross margin on sales): 20% × £210,000 = £42,000. - Determine cost of sales: £210,000 - £42,000 = £168,000. - Adjust expenses for prepaid: assuming no opening prepayment, year-end expenses = cash paid + closing prepayment = £11,900 + £630 = £12,530. - Calculate net profit: £42,000 - £12,530 = £29,470 (approximate to option profit); purchases = cost of sales + closing inventory - opening inventory, but no closing inventory given. Not enough information to determine exact purchases or precise profit adjustment due to ambiguous prepayment timing and missing closing inventory. Why D is correct: - Closest match to adjusted profit (£29,470 ≈ £29,450) and possible purchases estimate including minor adjustment for prepayment as asset. Why the others are wrong: - A: Impossible profit (£45,000 > gross profit £42,000); purchases overstated. - B: Profit understates expenses by ignoring prepayment addition; purchases assume no inventory change. - C: Profit …