Marvelous Ltd operates in its head office located in Lagos, Nigeria. The company has a branch in Awka, Anambra. The subsequent balances were extracted from the accounts of the head office and branch as at 30 June 2017.
The functional currency is the United States Dollar.
Additional information:
The functional currency of the head office and branch is the Naira (₦).
1. Inventory at 30 June 2017 was valued as follows:
₦
Head office (at cost) 16,000
Branch (at cost to branch) 19,200
Inventory in transit to branch (at cost to branch) 9,600
2. Inventory bought by the head office and sold to Marvelous Ltd in Awka are transferred at cost plus 20%.
3. Branch customers paid ₦8,000 to the branch for inventory.
Required:
i. Prepare the head office and branch separate statements of profit or loss for the year ended 30 June 2017; and
ii.Prepare the head office and branch separate statements of financial position as at 30 June 2017.
Study the suggested answer to practice activity 18.7 here.
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