The following information pertains to the head office (Candy K) located in Mbombela and its branch (Benoni) for the year ended 31 December 20.22.

Candy K is registered for VAT purposes and the current VAT rate should be used where applicable.

All inventories to the branch are supplied by the head office at selling price (Cost price plus 25%) Branch transactions for the year ended 31 December 20.22

Branch inventories at 1 January 20.22 (Selling price) 18 750

1 Inventory dispatched to branch at selling price (VAT Excl) 68 750

2 Inventory returned to head office by the branch (VAT Excl) 700

3 Inventory sales (40% are on credit) 51 750 4

Branch expenses paid by head office (Rent) 3 450

5 Returns from branch receivables (VAT Incl) 1 208

6 Donations of inventory to One people charity (@ Selling price; VAT excl) 350

7 Payments from receivables 2 500

8 Credit sales of obsolete stock at 15% discount on normal selling price 15 640

9 A decision has been taken to write off all branch receivables not able to pay their debts, R920. 920

REQUIRED:

The following ledger accounts:

a) Branch Gross profit

b) Branch profit or loss

Show all your calculations. Calculate all amounts towards the nearest Rand.