Nion is a retail goods outlet operating from a head office in London and a branch in Brighton. The following trial balances have been extracted from the books of account as at 31 October 2014.

Head Office Books Branch Books Dr Gr Dr Cr if £ £ 5 Drawings 40,000 Non-current assets: at cost 350,000 100,000 accumulated depreciation

(at 1 November 2013) 140,000 30,000 Inventory (at 1 November 2013) 8,000 20,000 Provision for unrealised profit 4,000 Purchases 914,000 Goods sent to branch at invoiced value 380,000 375,000 Sales 850,000 437,000 Allowance for doubtful debts 9,000 2,500 Head office/branch current accounts 175,000 120,000 Distribution expenses 80,500 5,000 Administrative expenses 200,000 16,500 Trade accounts receivable 60,000 60,000 Trade accounts payable 50,000 Cash and bank balances 15,500 13,000 Capital 410,000

£1,843,000 £1,843,000 £589,500 £589,500 Additional information:

1 All goods are purchased by the head office. Those goods sent to the branch are invoiced at cost plus 25%.

2 Inventories were valued at 31 October 2014 as being at head office, £12,000; and at the branch,

£15,000 at their invoiced price.

3 Depreciation is to be provided for the year on the non-current assets at a rate of 10% on the historic cost.

4 The allowance for doubtful debts is to be maintained at a rate of 5% of outstanding trade debtors as at the end of the financial year.

5 As at 31 October 2014, there was £50,000 cash in transit from the branch to the head office;

this cash was received in London on 3 November 2014. There was also £5,000 of goods in transit at invoice price from the head office to the branch; the branch received these goods on 10 November 2014.

Required:
Prepare in adjacent columns:

(a) the head office, and

(b) the branch income statements for the year ending 31 October 2014; and a combined statement of financial position for Nion as at that date.
Notes:
(i) acombined income statement is NOT required; and (ii) separate statements of financial position for the head office and the branch are also NOT required.