Jamila Traders has a head office in Nanyuki and an autonomous branch in Thika. The trial balances of the head office and the branch as at 30 September 2014 were as follows: Head office Sh. Sh. Thika Branch Sh. Sh. Buildings (at cost) 3,500,000 Goods sent to branch 6,482,205 Goods received from head office Accounts receivable 764,700 6,387,330 535,800 Remittances from branch 7,548,750 Remittances to head office 7,620,000 Cash at bank 397,800 289,250 Stock (at cost) 2,595,000 Stock (at mark up) 1,552,500 Sales Capital (1 October 2013) 13,000,000 6,040,925 9,202,200 Bank overdraft 250,000 Furniture and fittings 779,500 230,500 Purchases 13,626,600 Rent and rates 395,400 197,250 Salaries and wages Current accounts 851.700 487,500 8,931,555 8,836,680 General expenses 1,887,750 1,258,950 Accounts payable 1,239,000 270,200 Drawings 783,375 Provision for unrealized profits 202,500 34,513,380 34,513,380 18,559,080 18,559,080 Additional information: 1. 2. 3. 4. Depreciation on furniture and fittings is to be provided at the rate of 10% per annum using the reducing balance method. A bonus of 10% is payable to the staff at the head office and the branch. The bonus is based on net profits after charging these bonuses. Goods sent to the branch in August 2014 and which had an invoice value of Sh.94,875 were stolen in transit. The insurance company agreed to meet the claim to the extent of only 85% of the cost of the goods. Goods were invoiced to the branch at 15% above cost. All sales were at a mark up of 333% above the cost to head office. 5. No shortages of stock were reported at the head office or the branch. Required: (a) Prepare in columnar form for the head office, Thika branch and the combined business, the income statements for the year ended 30 September 2014. (12 marks) (b) The combined balance sheet as at 30 September 2014. (8 marks) L