QUESTION 20 (5 marks) Assuming the correct amount for branch adjustment (mark-down on sales) and branch adjustment (mark-down on cost) are R12 000 and R6 000 respectively. Which of the following represents the correct surplus/(deficit) in the branch inventory account as at 30 September 2019 after taking the additional information into account? 1. 2. 3. 4. R 59 030 surplus R 98 230 surplus R 40 230 deficit R 99 030 surplus The following information pertains to the head office and the branch of Ukhozi Sneakers. Branch inventory on hand at selling price 1 October 2018 30 September 2019 R 60 000 40 000 Transactions of the branch for the year ended 30 September 2019 Inventory transferred to the branch (selling price) Credit sales at the branch .... Settlement discount granted to branch debtors, Branch administrative expenses paid by head office. Damaged inventory written off (at cost).... R 188 500 285 530 2 433 17 375 3 200 Additional information (a) Inventory is purchased by the head office and supplied to the branch at selling price, which is cost price plus 25%. (b) The branch held a clearance sale during June 2019. Inventory was sold at selling price less 30%. The proceeds of the sale amounted to R49 250 and were included in the credit sales amount of R285 530 as indicated above