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

Benefits of sell some goods at a local music festival, 1. You have decided ...

1. You have decided to sell some goods at a local music festival. You have hired a sales stand for $500. Your cost per item is $3 and you will sell each item for $5. When you did y

Adjustment, A company does not need to record the receipt of a bill for uti...

A company does not need to record the receipt of a bill for utilities used during this year if they will not pay for it until next year. True or False

Us gaap, US GAAP follows the Historical Cost Concept in valuing the cost of...

US GAAP follows the Historical Cost Concept in valuing the cost of Long-Term Assets. Explain this principle and how it compares to the standards used in the reporting of Long-Term

Show the investment appraisal method, Q. Show the investment appraisal meth...

Q. Show the investment appraisal method? The investment appraisal method is concerned with assessing the value of future cash flows compared to the cost of investment. Since fu

Rules of intestacy-no spouse but children, The intestate leaves no spouse b...

The intestate leaves no spouse but children The net estate devolves upon the surviving children and is divided equally between them. If any child has not, at the time of intest

Debenture, X co has a bond outstanding that carries a coupon rate of 90% an...

X co has a bond outstanding that carries a coupon rate of 90% and current maturity is 15yrs and the call price is Rs 1060 per bond(25000 bonds Rs 1000 face amount)9% bond had origi

Trust law and accounts, Trust There is no generally accepted definition...

Trust There is no generally accepted definition of a trust, although many have attempted. Underhill defines a trust as"an equitable obligation binding a person (who is called a

Journal entry, XYZ Corporation recieves $100,000 from investors for issuing...

XYZ Corporation recieves $100,000 from investors for issuing them shares of its stock. XYZ's journal entry to record this transaction would include a a debit to investment b credit

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