Question 3 A retail trading company opens a branch which is supplied with its stock by its head office. The branch keeps its own customers' ledger and pays its daily cash receipts into a local bank for transmission to its head office. The head office invoices all goods to its branch at selling price and pays all branch expenses itself. Required The branch was opened on July 1. From the following particulars, show the entries in the head office books and prepare a statement showing the net profit made at the branch: Goods supplied by head office to branch, July 1 to December 31 (invoiced at selling price), R305 000 (note - the cost price of these goods was R240 000); 2300 0108 branch cash sales, R108 900; branch credit sales R160 100; cash received from debtors, R149 200; debtors at December 31, R10 900; - cost price stock on hand, December 31, at selling price, R36 000 R28 500; branch expenses paid by head office, R32 700; ignore value-added tax.