Branch account

Good day sir…I’m having problem on Branch and foreign branch account calculations please help me out…. this is part of the question I can’t solve….HOLINESS COMPANY LIMITED
On 1st March 2003, Holiness Company Limited resolved to open a branch in Paris to sell its
new range of bi-lingual dolls. The manager was authorised to purchase local French toys for
resale but it was expected that the major proportion of the sales would be of the bi-lingual
dolls supplied by Head Office in Kaduna. The manager was to be allowed a commission of
1% on the sales of the dolls supplied by Head Office. No commission was to be allowed on
locally purchased products.
On 28 February 2004, the trial balance was as follows:
Kaduna Head Office Paris Branch Office
N N France France
Share capital 400,000
Reserves 50,800
Profit and loss accounts 35,800 123,312
Creditors 44,250
Premises at cost 225,000
Fixtures and fittings at cost 147,000 840,000
Provision for depreciation of
Fixtures 58,000
Stock at March 143,000
Debtors 125,941 351,024
Bank balance 101,938 270,792
Cash in hand 9,821 86,004
Sales 1,010,786 2,661,345
Purchases 586,535 2,065,005
Goods sent to branch 135,000
Goods sent to branch 169,000 1,565,000Branch stocks adjustments account 33,800
Remittances from branch 110,000 1,293,500
Advance to branch 100,000 1,040,000
Administrative expenses 187,128 285,173
Distribution expenses 82,487 198,159
1,878,636 1,878,63 5,389,657 5,389,657
You have the following additional information:
As at February 2004, 12 France to the ?1 Stock on hand at 28 February, 2004 was
Kaduna 141,600
Paris- ex-Kaduna 263,000 Frances
Local purchases 82,000
2 Goods were invoiced by Kaduna to Paris at accost plus 25%.Paris sold the goods at
invoiced price plus 50%.The value of goods sent to Paris was based on a fixed conversation
rate of 10 France to the ?.
3 There were goods in transit that had been recorded in the Kaduna books at 12,500 but had
not been received or recorded by Paris at February 28, 2004.
4 Paris had remittance at 58,000 France on 27 February 2004 .It was received in 5 March and
converted to ?4,375
5 The advance of ?100,000 was remitted to Paris when the exchange rate was 10.4 France to
the ?. The fixtures and fittings were acquired when the exchange rate was 10.5 France to the
?, on June 2003.
6 Depreciation of the Kaduna and Paris fixtures and fittings is to be provided at the rate of
10% per annun on cost.
7 Rate of exchanged at other dates were:
As at 1 March 2003 10 France to
Average for financial year 11 Frances to ?
8 The company’ policy on the transaction of the branch balances at 28 February 2004 was to
use the following exchange rates:
Non-Current Assets- Rate of exchange at date of acquisition, current assets rate of exchange
at 28th February 2004
Current liabilities – rate of exchange at 28 February 2004 sales, local purchases and expenses
– average rate for the year. Goods sent from Kaduna – fixed rate of 10 francs to N
Required:
(a) Prepare a Statement of Profit and Loss & other comprehensive Income account in
columnar form for the head office, the Paris branch and the whole business for the year.
(b) Prepare a Statement of Financial Position as at 28th February 2004 for the whole