Star Stores has its head office and main store in Crewe, and a branch store in Leek. All goods are purchased by the head office. Goods are invoiced to the branch at cost price plus a profit loading of 20%. The following trial balances have been extracted from the books of account of both the head office and the branch as at 31 December 2016:

Additional information:
1 The inventories in hand at 31 December 2016 were estimated to be as follows:

In addition, £60,000 of inventory at invoiced price had been despatched to the branch on 28 December 2016. These goods had not been received by the branch until 5 January 2017 and so they had not been included in the branch books of account.

2 On 31 December 2016, the branch had transferred £15,000 of cash to the head office bank, but this was not received in Crewe until 2 January 2017.

Required:
(a) Prepare in adjacent columns: (i) the head office, and (ii) the branch trading accounts and profit and loss accounts for the year ending 31 December 2016; and
(b) Prepare Star Stores’ statement of financial position as at 31 December 2016.

Administrative expenses Distribution costs Capital (at 1 January 2016) Cash and bank Accounts payable and accruals Current accounts Accounts receivable and prepayments Motor vehicles: at cost accumulated depreciation at 31 December 2016 Plant and equipment: at cost accumulated depreciation at 31 December 2016 Proprietor's drawings during the year Provision for unrealised profit on branch inventory at 1 January 2016 Purchases Sales Inventory at cost/invoiced amount at 1 January 2016 Transfer of goods to the branch/from the head office Head Office Dr 000 380 157 25 255 130 470 250 64 880 80 2,691 Books Cr 000 550 176 280 120 5 1,200 360 2,691 Branch Dr 000 30 172 2 76 230 80 30 300 920 Books Cr 000 20 180 120 30 570 920