Mr. Otamaroh opened a new branch on 1st January 2015. The head office is to maintain all records. The Managing Director wishes to access the relative merits of the 3 system of changing goods to branches:

 At cost  At cost plus percentage, and At selling price.

He requires you to prepare appropriate ledger account under all the 3 systems.

He gives you the following information for the year ended 31st December 2018. N Goods sent to branch at cost 1,000,000 Returns from branch at cost 10,000 Branch credit sales 700,000 Cash takings remitting to head office 200,000 Branch expenses paid out of takings 19,000 Cash takings stolen (insured) 3,000 Closing stock at branch (at cost) 250,000 There was no cash in and in December 31st - Goods are invoiced at cost plus 25% which is selling price?

Goods pilfered (at cost) 800 Allowance of selling Price 2,000?

Answer rating: 100% (QA)

At Cost System Under this system the head office would maintain two ledger accounts One would be the ... View the full answer