Illustration of marked up by an additional amount, Financial Accounting

Illustration of marked up by an additional amount

E Limited sent goods to its branch in Thika invoiced at selling price, which was cost plus 505 of cost.  On 1st July 20X2, the opening stock in Thika was Shs 3 million at selling price. Goods at selling price of SHS 16.5 million were received by Thika in the year ended 30th June 20X3.

Branch Stock A/C

20X2

 

Shs 000

20X3

 

Shs 000

Jul 1

Balance b/f

3,000

Jun 30

Cashbook/debtors

16,800

20X3

 

 

 

 

 

June 30

Sundry a/c

16,500

 

 

 

Feb 28

Branch Markup a/c

1,600

Jun 30

Balance c/d

4,300

 

 

21,100

 

 

21,100

20X3

 

 

 

 

 

Jul 1

Balance b/d

4,300

 

 

 

 

Branch Mark Up A/C

20X3

 

Shs 000

20X2

 

Shs 000

Jun 30

Branch profit and loss a/c

6,400

July 1

Bal b/f

1,000

 

 

 

20X3

 

 

Jun 30

Bal c/d

1,700

Jun 30

Branch stock a/c

5,500

 

 

_____

Feb 28

Branch stock

1,600

 

 

8,100

 

 

8,100

 

 

 

20X3

 

 

 

 

 

July 1

Balance b/d

1,700

 

Workings

a.        

Sales

Selling price

Gross profit

Cost of sales

 

Sh ‘000’

Sh ‘000’

Sh ‘000’

Total sales

16,800

6,400

10,400

Marked up goods (75% X Shs 7.6m)

5,700

2,700

3,000

Normal sales

11,100

3,700

7,400

 

b.       

Closing stock

 

 

 

Total

4,300

1,700

2,600

Marked up goods

1,900

900

1,000

Normal sales

2,400

800

1,600


On 28th February 20X3, goods valued at selling price of Shs 6 million were marked-up by a further 40% of cost price. 75% of these goods were sold in the year ended 30th June 20X3. The remaining 25% were held in stock at 30th June 20X3.  Sales for the year ended 30th June 20X3 amounted to Shs 16.8 million. Write up the Branch Stock and the Branch Mark-up accounts.


It can be seen that if goods are sold at a price in excess of the normal selling price, an additional profit is earned.  Goods may be sold at a price in excess of the normal selling price without authority from the HO; if this occurs, the credit side of the branch stock account exceeds the debit side by the amount of the additional profits.

Posted Date: 12/12/2012 12:48:40 AM | Location : United States







Related Discussions:- Illustration of marked up by an additional amount, Assignment Help, Ask Question on Illustration of marked up by an additional amount, Get Answer, Expert's Help, Illustration of marked up by an additional amount Discussions

Write discussion on Illustration of marked up by an additional amount
Your posts are moderated
Related Questions
Q. Estimate the systematic risk of the new investment? The beta of the comparator company will be utilized to estimate the systematic risk of the new investment. No un-gearing


Q. Capital asset pricing model to estimate a project? CAPM could have been utilized to estimate a project - specific Ke if the project activities were different from that of th

how to treat salary compensation given to an employee how to show this in company account

agency conflicts and solutions in shareholders vs auditors

in recent years Morten Ltd, a company that manufactures and markets a range of pharmaceutical products.

Investment with ex. div. quotation Investment with ex. div. quotation will be debited to the investment account at its ex. div. value. The full impending dividend will also

Illustration-statement of Changes in Net Assets-pension fund (a) What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up

a. Find five comparables for Bank of America (BAC) b. Find the CEO of BAC and five comparable companies, For BAC and all firms, find: c. Market value, alpha and beta (pric

EXPRESS TRUSTS Creation : An express trust is "created not by facts and circumstances, but by the express words of the settlor". (Fitzgerald v Stewart) Completely an