OTL Ltd commenced business on 1 January 20X0. The head office is in London and there is a branch in Highland. The currency unit of Highland is the crown.

The following are the trial balances of the head office and the Highland branch as at 31 December 20X0:

The trial balance of the head office was prepared before any entries had been made in respect of any profits or losses of the branch.

Remittances from head office to branch and from branch to head office were recorded in the books at the actual amounts paid and received.

The rates of exchange were:

Required:

(a) The trial balance of the Highland branch as at 31 December 20X0, in sterling.

(b) The closing entries, as at 31 December 20X0, in the branch account in the books of the head office.

(c) A summary of the balance sheet of OTL Ltd as at 31 December 20X0. Ignore depreciation of fixed assets. Ignore taxation.

Transcribed Image Text:

Branch account Balances at bank Creditors Debtors Fixed assets (purchased 1 January 20X0) Head office account Profit and loss account (net profit for year) Issued share capital Stocks Head Office £ 65,280 10,560 18,480 39,600 26,400 160,320 £ 21,120 52,800 86,400 160,320 Highland Branch Crowns 66,000 158,400 145,200 118,800 488,400 Crowns 92,400 316,800 79,200 488,400