The following information relates to the branch and head office of Fish CC: R 1. Balances at 1 January 20.1: Bank (favourable) 10 000 Inventory (at cost price) 9 200 2. Transactions of the branch during the year ended 31 December 20.1: R Inventory sent to branch at cost 108 000 Credit sales 38 400 Cash sales 88 000 Inventory returned to head office at cost 2 400 Payments by branch debtors 20 000 Settlement discount granted to branch debtors 600 Damaged inventory written off at cost 2 000 Additional information: 1. Inventory supplied to the branch is invoiced at selling price, which is cost plus 20%. 2. An amount of R15 000, included in cash sales, was in respect of sales of inventory purchased from other suppliers and paid for by head office. The profit mark-up on inventory purchased from other supplies is also 20% on cost. 3. A sales person embezzled cash amounting to R750 received from cash sales and the transaction is still to be recorded in the books. 4. To boost the December sales, a special promotion was held at the branch where inventory was sold at selling price less 25%. Proceeds from the special promotion amounted to R22 500 and the amount is included in the cash sales figure. 5. When a physical inventory count was undertaken at the branch, it was discovered that inventory with a cost price of R4 000 was missing. The matter was investigated and it was established that inventory was stolen. 6. The branch donated inventory with a selling price of R1 800 to a local charitable organisation 7. Inventory on hand at 31 December 20.1, according to the physical inventory count, amounted to R9 600 (at selling price). Required: Prepare the following accounts in the general ledger of Fish CC: a) Branch inventory; b) Inventory to branch; c) Branch adjustment; d) Trade receivables control; e) Bank; f) Settlement discount granted; and g) Branch expense. Balance and close off all the accounts at 31 December 20.1. The following information relates to the branch and head office of Fish CC: R 1. Balances at 1 January 20.1: Bank (favourable) 10 000 Inventory (at cost price) 9 200 2. Transactions of the branch during the year ended 31 December 20.1: R Inventory sent to branch at cost 108 000 Credit sales 38 400 Cash sales 88 000 Inventory returned to head office at cost 2 400 Payments by branch debtors 20 000 Settlement discount granted to branch debtors 600 Damaged inventory written off at cost 2 000 Additional information: 1. Inventory supplied to the branch is invoiced at selling price, which is cost plus 20%. 2. An amount of R15 000, included in cash sales, was in respect of sales of inventory purchased from other suppliers and paid for by head office. The profit mark-up on inventory purchased from other supplies is also 20% on cost. 3. A sales person embezzled cash amounting to R750 received from cash sales and the transaction is still to be recorded in the books. 4. To boost the December sales, a special promotion was held at the branch where inventory was sold at selling price less 25%. Proceeds from the special promotion amounted to R22 500 and the amount is included in the cash sales figure. 5. When a physical inventory count was undertaken at the branch, it was discovered that inventory with a cost price of R4 000 was missing. The matter was investigated and it was established that inventory was stolen. 6. The branch donated inventory with a selling price of R1 800 to a local charitable organisation 7. Inventory on hand at 31 December 20.1, according to the physical inventory count, amounted to R9 600 (at selling price). Required: Prepare the following accounts in the general ledger of Fish CC: a) Branch inventory; b) Inventory to branch; c) Branch adjustment; d) Trade receivables control; e) Bank; f) Settlement discount granted; and g) Branch expense. Balance and close off all the accounts at 31 December 20.1
