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ILLUSTRATION 2 (Where penalty is charged from manager for shortage of goods): Premier company has two branch retail shops X and Y, with a separate
ILLUSTRATION 2 (Where penalty is charged from manager for shortage of goods): Premier company has two branch retail shops X and Y, with a separate Manager. The ratio of Gross Profit to selling price is constant at each shop at 25% throughout the year to 31st March, 2015. Each branch manager is entitled to a commission of 10% of the net profit earned by his branch, calculated before charging his commission but subject to a deduction from such commission equal to 15% of any ascertained deficiency of the Branch Stock. All goods are supplied by the head office to these branches. From information given below, calculate the commission due to each manager for the year 2014-15. Branch X Branch Y Stock at 1-4-2014 at cost 18,684 12,484 Goods to Branches at cost 72,420 43,480 Sales 90,320 58,560 Drawing of Commission A/c by Manager 500 300 Miscellaneous expenses 12,280 9,020 Stock at 31-3-2015 at cost 20,832 10,952
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