Below is the Trial Balance of Emotion Enterprise extracted from the books of the head office and
Question:
Below is the Trial Balance of Emotion Enterprise extracted from the books of the head office and the branch as at 30 June 2019:
Head | Office | Branch | ||
RM | RM | RM | RM | |
Account Receivables | 56,170 | 13,340 | ||
Account Payables | 18,000 | 36,300 | ||
Fixtures and fittings | 100,000 | 14,000 | ||
Head Office current account | 18,138 | |||
Land and building | 155,000 | 110,000 | ||
Motor vehicles | 80,000 | 40,000 | ||
Accumulated depreciation: | ||||
Fixtures and fittings | 20,000 | 2,800 | ||
Motor vehicles | 8,000 | 4,000 | ||
Legal expenses | 1,880 | 700 | ||
Administration expenses | 8,200 | 10,100 | ||
Bank | 13,208 | 3,520 | ||
Allowance for unrealised profit (1 July 2018) | 1,308 | |||
Purchases/Sales | 50,000 | 256,460 | 170,510 | |
Goods from head office | 19,500 | |||
Goods sent to branch | 21,000 | |||
Selling and distribution expenses | 23,300 | 6,200 | ||
Inventories as at 1 July 2018 | 16,680 | 14,388 | ||
Capital | 201,308 | |||
Branch current account | 21,638 | |||
526,076 | 526,076 | 231,748 | 231,748 |
Additional information:
- Goods are sent to branch at cost plus 10%. The branch maintains its own ledgers and is allowed to purchase from local supplier.
- Depreciation is to be provided on fixtures and fittings at 20% per annum and motor vehicles at 10% per annum, using straight line method.
- Branch stock, taken on 30 June 2019, revealed a shortage of RM550 at transfer price.
- As at 30 June 2019, goods sent by the head office amounted to RM1,500 was only received by the branch on 5 July 2019.
- The branch deposited a cheque of RM2,000 to the head office on 30 June 2019 but has not yet been received by the head office until 3 July 2019.
- The head office closing inventories are valued at a cost of RM30,000, while for the branch, its closing inventories are valued at a transfer price of RM15,000.
- Included in the administrative expenses of the branch was an amount of RM700 to be charged to the head office. No entry had been made in both books.
Required:
- Prepare Statement of Profit or Loss for the head office, branch, and business as a whole for the year ended 30 June 2019 (in columnar form).
Prepare the Combined Statement of Financial Position as of 30 June 2019.
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver