Linken Ltd. with a Head Office in Calcutta opened a branch on January 1, 2014, at Kanpur where all sales were to be made on credit basis.

All goods required by the branch were supplied by the company from Calcutta and invoiced to the branch at 20 per cent above cost. During the year ended 31st December, 2014 the following transactions took place:

Particulars	~	Particulars	~
Goods sent to Kanpur branch (at cost to H.O.)	22,000	Returns to Calcutta office (at cost to H.O.)	840
Sales as shown by Kanpur branch report	19,670	Cash received from debtors and remitted to Calcutta	15,190
Debtors balance at branch written-off as bad	640

Loss of goods at branch through pilferage is estimated at 1 per cent of goods received. The stock of goods held by the branch on 31st December, 2014 amounted to ~ 5,820 at invoiced price.

Answer rating: 100% (QA)

1 Calculate the profit or loss of the Kanpur branch for the year ended 31st December 2014 Calc... View the full answer