Question $5$

Study the scenario and complete the questions that follow:

Banana enterprises:

The following information relates to the branch and head office of Banana enterprises:

Balances at $1$ January $2022$:

R

Inventory $($at selling price$)$

$19500$

Transactions of the branch during the year ended $31$ December $2022$:

Inventory sent to branch at selling price

$114000$

Credit sales

$54800$

Cash sales banked

$30000$

Inventory returned to head office at cost

$8500$

Damaged inventory written off at cost

$12000$

Additional information:

$1.$

Inventory supplied to the branch is invoiced at selling price, which is cost plus $20\%$

$2.$

The profit mark$-$up on inventory purchased by the branch is $15\%$ on cost$.$

$3.$

Cash amounting to R$11000$ received from cash sales was stolen during a robbery. This transaction is still to be recorded in the books.

$4.$

In order to boost December sales, a special sales promotion was held at the branch where inventory was sold at selling price less $20\%.$ Proceeds from the special promotion amounted to R$20160.$ The amount is included in the cash sales figure.

$5.$

An amount of R$15000,$ included in cash sales banked, was in respect of sales of inventory purchased by the branch and paid for using cash collected from sales.

$6.$

When a physical inventory count was undertaken at the branch, it was discovered that inventory with a selling price of R$1200$ was missing. The matter was investigated, and it was established that the inventory was stolen.

$7.$

The branch donated inventory with a selling price of R$3360$ to a local not for profit company.

$8.$

According to the physical inventory count, Inventory on hand at $31$ December $2022$ amounted to R$5000($at cost price$).$

You are required to:

Prepare the Branch inventory account in the general ledger of Banana enterprises for the year ended $31$ December $2022(20$ Marks$)$