General Dealers General Dealers in Midrand sends goods to its branch in Pretoria at cost plus 50%.
Question:
General Dealers General Dealers in Midrand sends goods to its branch in Pretoria at cost plus 50%.
The following information is applicable for the year ended 30 April 2020:
Head office: Pretoria inventory on 1 May 2019 at cost price: R20 000
Head office: Pretoria inventory on 30
April 2020 at selling price: R27 500
Purchases: R39 900
Goods to Pretoria branch at selling price: R260 000
Cash sales: R115 000
Credit sales: R111 000
Sundry expenses paid by the head office: R44 100
Additional information:
Slow moving inventory at the branch was sold at a discount of 20%.
The proceeds of these items amounted to R15 000 and were included in the cash sales.
The branch returned damaged inventory on the last day of the financial year, R10 000.
The head office is not registered for VAT and the branch only has a bank account. Source: Klopper, J. 2020.
Required
Use the information given above to write up the Branch Inventory account in the records of the head office for the year ended 30 April 2020.
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren