Branch 2

Exercise 2 The following information has been extracted from the head office books of Phane Processing Ltd which has a head office in Gaborone and a branch in Francistown. The information was extracted as at 31 March 2006. Information relating to the branch: 1 April 2005 31 march 2006 Branch bank account P3 000 P 12 000 Branch debtors P66 000 P81 000 Branch stock (selling price) P75 000 P90 000 Transactions during the year ended 31 March 2006 P Bad debts written off 15 000 Branch expenses (paid from branch bank) 42 000 1 Cash received from credit customers and banked 390 000 Cash sales banked 120 000 Cash transferred from branch to H/O bank account 459 000 Credit sales 437 000 Discount allowed to credit customers 9 000 Goods returned by credit customers 8 000 Goods returned from branch (at selling price from h/o) 30 000 Goods sent to branch (selling price from h/o) 600 000 Additional information: 1. Most of the accounting records relating to the branch are kept by the Head Office in its own books of account. 2. All purchases are made by the Head Office and goods are invoiced to the branch at selling price, that is, at cost price plus 25 per cent. Required to prepare in the head office books: a) Branch stock account (selling price) b) Goods sent to branch account c) Branch stock adjustment account d) Branch debtors account e) Branch bank account