Question

Benjie Ltd, whose head office is at Anyinam, operates a branch at Osino. All goods are purchased by head office and invoiced to and sold by the branch at cost plus thirty three and ON3 one third (33 1/3) percent. other than sales ledger kept at Osino, all transactions are recorded in the books at Anyinam. The following particulars are given of the transactions at the branch during the year ended 28 February 2014: Stock on hand, 1" March 2013, at invoice price GHC 4,400 Debtors on 1" March 2013 3.946 3.948 Stock on hand, 28" February 2014, at invoice price Goods sent from Anyinam during the year at invoice price 24,800 Credit Sales 21,000 2,400 Cash Sales 1,000 Returns to head office at invoice price 600 Invoice value of goods stolen 148 Bad debts written off 22,400 Cash from Debtors 100 Normal loss at invoice price due to wastage 428 Cash Discount allowed to Debtors Required: Use the Memorandum Column Method and write up the Branch Stock Account and the Branch Debtors Account for the year ended 28 February 2014, as they would appear in the head office books (30 marks) 21

Answer 1

Branch stock account and the branch debtors account for the year ended 28th February 2014 are as follows:Note: Normal loss at invoice price due to wastage shall be recorded in head office books not in branch stock account.

Osing Branch Stock Account Particulars Amount Particulars Amount To Balance bld 4400 By Goods Sent to Branch 1000 (Goods returned to Head Office) To Goods Sent to Branch 24800 By Branch Cash 2400 (Cash Sales To Branch Debtors By Branch Debtors 2100D (Credit sales) 252 (bal fig) 600 By loss by theft balance cld 39.48 By 29452 29452 Amount Particular To Balance old Osino Branch Dehtoss Account Amount Particulars 3396 By Branch Cash 22400 To Branch Stock 148 21000 By Branch expenses -Bad debts Cash discount 428 252 By Branch Stock 1168 By Balance Old (bal. fig.) 24396 124396