Star Stores has its head office and main store in Crewe, and a branch store in Leek. All goods are purchased by the head office. Goods are invoiced to the branch at cost price plus a profit loading of 20%. The following trial balances have been extracted from the books of account of both the head office and the branch as at 31 December 2012:

Head Office Books Branch Books Dr Cr Dr Gr

£000 £000 £000 £000 Administrative expenses 380 30 Distribution costs 157 172 Capital (at 1 January 2012) 550 Cash and bank 25 2 Accounts payable and accruals 176 20 Current accounts 255 180 Accounts receivable and prepayments 130 76 Motor vehicles:

at cost 470 230 accumulated depreciation at 31 December 2012 280 120 Plant and equipment: se at cost | 250 80 accumulated depreciation at 31 December 2012 120 30 Proprietor’s drawings during the year 64 Provision for unrealised profit on branch inventory at 1 January 2012 5 Purchases 880 Sales 1,200 570 Inventory at cost/invoiced amount at 1 January 2012 80 30 Transfer of goods to the branch/from the head office 360 _ 300 ae

£2,691 £2,691 £920 £920 Additional information:

1 The inventories in hand at 31 December 2012 were estimated to be as follows:

£000 At head office (at cost) 100 At the branch (at invoiced price) 48 In addition, £60,000 of inventory at invoiced price had been despatched to the branch on 28 December 2012. These goods had not been received by the branch until 5 January 2013 and so they had not been included in the branch books of account.

2 On 31 December 2012, the branch had transferred £15,000 of cash to the head office bank, but this was not received in Crewe until 2 January 2013.
Required:
at presars in adjacent columns: (/) the head office, and (ii) the branch trading accounts and profit and loss accounts for the year ending 31 December 2012 (note: a combined income statement is NOT required); and

(b) Prepare Star Stores’ statement of financial position as at 31 December 2012 (note: separate statements of financial position for the head office and the branch are NOT required).