Need help in accounting for leases? dive in this document for more information.
2 views 0 purchase
Course
ACCT 221
Institution
Kabarak University
this document will give you in-depth insight-fullness in the field of finance. feel free to explore it. A brief summary is: IFRS 16, effective from January 2019, revolutionized lease accounting. It eliminated the distinction between operating and finance leases for lessees. Now, all leases are tr...
Dear learner this lesson continues with accounting for branches. In the previous lesson we
looked at accounting for dependent branches where goods are sent at cost. In this lesson we are
now going to look at accounting for dependent branches where goods are sent at cost plus mark
up or at selling price
Expected leaning outcomes
By the end of this lesson the learner should be able to
1. Prepare branch stock account
2. Prepare branch mark up account
3. Explain the meaning of mark up and mark up
4. Explain the meaning of surplus and deficit
5. Prepare branch income statement
Where goods are sent at cost plus mark up or at selling price
This is where the head office sends goods to the branch at cost plus a percentage mark up or at
selling price. Similar accounts as when goods are sent at cost are maintained but in addition to
those accounts a branch mark up account is maintained by the head office. This account will
determine the gross profit or loss. where goods are sent at cost plus mark up or at selling price
the branch stock account serves as purely stock movement account and do not determine the
profit or loss.
The format of the branch stock account and branch mark up accounts are as follows
Page 1 of 12
, 1. Branch Stock Account
Branch Stock Account
Bal bld xx Returns to head office xx
Goods sent xx Sales : Cash xx
Returns by customers xx : Credit xx
Goods from other branches xx Goods sent to other branches xx
Direct returns xx Goods stolen xx
Mark up xx Direct returns xx
Surplus xx Mark down xx
Deficit xx
Bal c/d xx
XX XX
2. Branch Mark up account
Branch Mark up Account
Returns by branch xx Bal b/d xx
Goods sent to other branches xx Goods sent xx
Direct returns xx Goods from other branches xx
Returns by customers xx Mark up xx
Mark down xx Surplus xx
Goods stolen xx Gross loss xx
Deficit xx
Gross loss xx
Bal c/d xx
XX XX
The branch mark up account only records the profit element or figure in the items above. When
goods are sent at cost plus mark up or at selling price the following terms arises
Page 2 of 12
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller francismasila12494. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.29. You're not tied to anything after your purchase.
