Illustration of marked up by an additional amount, Financial Accounting

Assignment Help:

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.


Related Discussions:- Illustration of marked up by an additional amount

Balance sheet, Is there two type of way to do balance sheet?

Is there two type of way to do balance sheet?

Cash flow estimation and capital budgeting, Cash flow Estimation and Capita...

Cash flow Estimation and Capital Budgeting XYZ Electronics, Inc. is a manufacturer of eBook Readers. Its current model is selling excellently. However, in order to cope with t

Inter company balances-group accounts, Inter Company balances One of th...

Inter Company balances One of the companies may appear as receivable (debtor) or payable (creditor) in the other company’s books. Just like in accounting four branches, such in

Calculate the percentage change in equilibrium level, Consider a hypothetic...

Consider a hypothetical banking system in which banks produce only demand deposit accounts. The currency deposit ratio (c) is 30% and the customary cash reserve ratio (r) for deman

During the course you will be required to develop a , During the course you...

During the course you will be required to develop a Course Project having to do with writing notes for a fictitious annual report.

Economic order quantity formula, For getting the EOQ formula we shall use t...

For getting the EOQ formula we shall use the subsequent symbols: U = annual usage/demand Q = quantity ordered F = cost per order C = per cent carrying cost P  = pric

What kinds of business ownership exist, What kinds of business ownership ex...

What kinds of business ownership exist? Particular form of business ownership has significant implications for accounting purposes and so it's useful to be clear about the main

Prepare journal entries - bussiness accounting, Question 1  Describe a...

Question 1  Describe and differentiate the four (4) different Financial Statements. HINT : use examples of actual companies or transactions to illustrate your answer. Give

lifo, How do I prepare a partial income statement under each inventory met...

How do I prepare a partial income statement under each inventory method?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd