Darlington Ltd had always operated from Harare. On 01.01.2015 the company decided to open a main branch in Bulawayo. The Branch was to maintain its own accounting records. The following balances were extracted from the Darlington Ltds books.

Non-current assets 100 000

Stock 80 000

Debtors 40 000

Bank 60 000

Creditors 30 000

Ordinary Share Capital 200 000

Retained Profits 50 000

During the month of January 2015, the following took place:

Head Office Activities

Opened a branch in Bulawayo and opened a bank account immediately, into which Darlington Ltd deposited $30 000 by a cheque drawn on the Harare bank account.

Sent some non-current assets which included refrigerators, furniture and fittings to Bulawayo. They had a book value of $40 000.

Sent goods worth $35 000 to Bulawayo.

Paid for branch purchases by a cheque drawn on Harare branch $8 000.

Purchased goods for resale for cash $45 000.

Sold goods for cash $77 000.

Paid for Sundry expenses $12 000.

Branch Activities

Bought goods for resale $10 000.

Sold goods on credit $60 000.

Received $40 000 from debtors. A debtor of $15 000 paid directly to the head office.

Paid hotel and travelling expenses for a Harare branch executive $2 000.

Paid wages, salaries and expenses $5 600.

Sold goods for $20 000 cash.

Sent $25 000 to the Head Office as a general return funds.

Additional Information

Stock at 31/01/2015 were as follows:

Head office $34 000

Branch $14 000

Required:

Assuming that there were no movement in the debtors and creditors of the Head Office:

Prepare

Head office Trading Profit and Loss a/c and the Statement of Financial Position.

Branch Trading Profit and Loss a/c and the Statement of Financial Position.