A Head Office sends goods to its branch at cost plus 10%. On other sales the Head Office makes a uniform profit of 33⅓%. The Branch sells goods at a uniform profit of 25%. Following transactions took place during the year ended 31st March, 2015: (I) Head Office purchases amounted to $ 7,32,000 and purchase returns were $ 30,825 and discounts allowed by suppliers amounted to $ 15,045. (II) Sales by Head Office amounted to $ 5,40,000. Goods sent by Head Office to Branch at invoice price amounted to $ 2,72,250. Discounts allowed to customers were $ 4,950. (III) Goods sent to Branch on 31st March, 2015 amounting to $ 33,000 were in transit. (IV) Goods purchased by the Branch locally were of $ 91,312. (V) Establishment and other expenses at Head Office were of $ 1,40,130 and at the Branch of $ 40,238. (VI) Sales by the Branch amounted to $ 3,60,000; discount allowed to customers was $ 2,820 and cost of goods lost in transit was $ 4,005. (VII) Stock of goods at the Branch as on 31st March, 2015 included goods received from Head Office for $ 57,750. Prepare a columnar Trading and Profit & Loss Account for Head Office and the Branch for the year ended 31st March, 2015.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 11RE: Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year,...

See similar textbooks

Related questions

Question

A Head Office sends goods to its branch at cost plus 10%. On other sales the Head Office makes a uniform profit of 33⅓%. The Branch sells goods at a uniform profit of 25%. Following transactions took place during the year ended 31st March, 2015: (I) Head Office purchases amounted to $ 7,32,000 and purchase returns were $ 30,825 and discounts allowed by suppliers amounted to $ 15,045. (II) Sales by Head Office amounted to $ 5,40,000. Goods sent by Head Office to Branch at invoice price amounted to $ 2,72,250. Discounts allowed to customers were $ 4,950. (III) Goods sent to Branch on 31st March, 2015 amounting to $ 33,000 were in transit. (IV) Goods purchased by the Branch locally were of $ 91,312. (V) Establishment and other expenses at Head Office were of $ 1,40,130 and at the Branch of $ 40,238. (VI) Sales by the Branch amounted to $ 3,60,000; discount allowed to customers was $ 2,820 and cost of goods lost in transit was $ 4,005. (VII) Stock of goods at the Branch as on 31st March, 2015 included goods received from Head Office for $ 57,750. Prepare a columnar Trading and Profit & Loss Account for Head Office and the Branch for the year ended 31st March, 2015.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.