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
EXAMPLES OF HOW VAT SYSTEM WORKS

A summary of Jarvis Company's December 31, 2013, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: Age Gro

Q. Which one of the following is not necessary in order for a corporation to pay a cash dividend? a. Adequate cash b. Approval of stockholders c. Declaration of dividends by the bo

Grants are not necessarily recognized as revenue when they are awarded. Columbus City was awarded a state reimbursement grant of $150,000 to assist its adult literacy program. The


What is asset turnover - Asset turnover is a ratio which is considered as measures the effectiveness with which a business uses its assets in relation to the level of sales or inc

Surviving Spouse - This is a person whose wife or husband died during tax year. A surviving spouse can file a JOINT RETURN for the year in which death occurred. Additionally a join

A Treasury bond that matures in 10 years has a yield of 3%. A 10-year corporate bond has a yield of 9%. Suppose that the liquidity premium on the corporate bond is 0.8%. What is th

Use the data from "Beating the Market Quarterly" problem. Use that data to estimate expected returns and a covariance table for the 5 stocks from that problem. Use your estimates t

A net loss resluts in a decrease in: a. Revenues b. Expenses c. Stockholder's Equity d. Liabilities