Use the information below to answer questions Adex Ltd. issues stock to its retail branches at cost price. The following particulars relate to Ede branch. S...
Question 1 Report
Use the information below to answer questions Adex Ltd. issues stock to its retail branches at cost price. The following particulars relate to Ede branch. Stock at branch 1st January at cost............₦400 Goods sent to branch at cost...................₦8000 Returns to head ...............................₦340 Cash sales ....................................₦9160 Stock at branch 31st December at cost..........₦720
Calculate the cost of goods credited to the head office trading account?
Answer Details
The cost of goods credited to the head office trading account is the sum of the cost of goods sent to the branch and the cost of returns to the head office deducted from the cost of opening stock at the branch and the cost of closing stock at the branch.
Using the figures given:
Cost of goods sent to branch = ₦8000
Cost of returns to head office = ₦340
Cost of opening stock = ₦400
Cost of closing stock = ₦720
Therefore, cost of goods credited to head office trading account =
(₦8000 + ₦340) - (₦400 + ₦720) = ₦7660
Hence, the answer is ₦7660.
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