OTLLtd commenced business on 1 January 2010. The head office is in London and there is a branch in Highland. The currency of Highland is the crown.

The following are the trial balances of the head office and the Highland branch as at 31 December 2010:

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 2010, in sterling.

(b) The closing entries, as at 31 December 2010, in the branch account in the books of the head office.

(c) Asummary of the balance sheet of OTL Ltd as at 31 December 2010.
Ignore depreciation of fixed assets.
Ignore taxation.

Transcribed Image Text:

Head Office Highland Branch Crowns Crowns Branch account 65,280 Balances at bank 10,560 66,000 Accounts payable 21,120 92,400 Accounts receivable 18,480 158,400 Non-current assets (purchased 1 January 2010) 39,600 145,200 Head office account 316,800 Profit and loss account (net profit for year) 52,800 79,200 Issued share capital Inventory 86,400 26,400 118,800 160,320 160,320 488,400 488,400