Pyramid company – CSOFP

Pyramid sells goods to Square at cost plus 50%. Below is a summary of the recorded
activities for the year ended 31 March 20X2 and balances as at 31 March 20X2:

Sales to Square 16,000
Purchases from Pyramid 14,500
Included in Pyramid’s receivables 4,400
Included in Square’s payables 1,700
On 26 March 20X2, Pyramid sold and despatched goods to Square, which Square did
not record until they were received on 2 April 20X2. Square’s inventory was counted
on 31 March 20X2 and does not include any goods purchased from Pyramid.
On 27 March 20X2, Square remitted to Pyramid a cash payment which was not
received by Pyramid until 4 April 20X2. This payment accounted for the remaining
difference on the current accounts.

How do I think to solve this scenario under exam circumstances? Please give me a simple approach.

Here is how I understand it:

Dr. payables 1700 (reduce the payables balance by 1700)
Cr. receivables 4400 (reduce the receivables by 4400)
Dr. inventory 1500 (add 1500 to group inv in CSOFP)
Dr. bank 1200 (balancing figure)

Subtract unrealized profit from group inv and CRE.
Dr. CRE/profit 500
Cr. inventory 500

I understand these double entries but not entirely. What should my thought process be if this (or similar) scenario pops up in the exam.

Thank you!