Josephine's business is experiencing losses due to missing inventory. Explain how a periodic inventory system leads to year-end discovery and suggest a perpetual inventory system as a solution.

To solve the calculation questions, I need the financial data for the business, such as opening stock, purchases, sales, and the results of any physical inventory counts. This information is not visible in the provided image.

However, I can answer the conceptual questions:

a) Explain to Josephine why she only discovered the loss at the end of the year.
Josephine likely uses a periodic inventory system. Under this system, inventory is only physically counted and valued at the end of an accounting period. This means that any discrepancies, such as missing or stolen items, are only identified when the physical count is compared to the expected inventory balance at year-end.

b) Suggest ONE additional measure that she can implement to address the problem of missing items.
Josephine could implement a perpetual inventory system. This system continuously updates inventory records for every purchase and sale, allowing for real-time tracking of stock levels and making it possible to identify missing items much sooner than at year-end.