Departmental and Branch Accounts

A head office supplies goods to its dependent branch at an invoice price loaded with a mark-up of 20% on cost. At the end of the trading period, the branch holds closing inventory valued at ₦30,000 at invoice price. What is the amount of stock reserve required to remove the unrealized profit from the closing inventory?

Apex Commercial Enterprises operates several regional sales outlets. One of its outlets, Branch K, keeps its own full set of accounting books under double-entry rules, makes local stock purchases, and extracts its own trial balance at the end of each accounting year. Which of the following accounting features unreservedly applies to Branch K as an independent branch rather than a dependent branch?

A head office forwards merchandise to its dependent branch at an invoice price loaded at a mark-up of $33\frac{1}{3}\%$ on cost. The branch ledger records show the following inventory transactions at invoice price for the trading period:

- Opening inventory: $\text{₦}15,000$
- Goods received from head office: $\text{₦}120,000$
- Goods returned to head office: $\text{₦}12,000$
- Closing inventory: $\text{₦}18,000$

Assuming all remaining goods were sold at the designated invoice price, what is the gross profit realized by the branch during the period?

In the books of Apex Trading Enterprise, the Branch Current Account in the Head Office ledger shows a debit balance of $\text{₦}145,000$, while the Head Office Current Account in the Branch ledger shows a credit balance of $\text{₦}110,000$ at year-end. Upon reconciliation, it was discovered that a cash remittance of $\text{₦}20,000$ sent by the branch had not yet been received by the head office, and goods worth $\text{₦}15,000$ dispatched by the head office were still in transit to the branch. What is the reconciled balance of the inter-company current account?

A trading enterprise operates two regional sales outlets in different locations. Outlet X receives all inventory directly from the head office, remits all daily cash receipts to the head office bank account, and relies entirely on the head office to maintain its accounting records. Outlet Y, on the other hand, maintains a complete double-entry ledger system, purchases inventory locally, and extracts its own trial balance at the end of the financial period. Which of the following accounting classifications correctly describes Outlet X and Outlet Y?

A head office transfers goods to its dependent branch at an invoice price loaded at a mark-up of $25\%$ on cost. During the financial period, goods sent to the branch amounted to $\text{₦}200,000$ at invoice price, while goods returned by the branch to the head office at invoice price totaled $\text{₦}16,000$. What is the total profit load (unrealized profit element) contained in the net goods sent to the branch?

A head office invoices goods to its dependent branch at a selling price that includes a profit margin of $25\%$ on invoice price. At the end of the accounting year, the branch stock count shows closing inventory valued at $\text{₦}60,000$ at invoice price. What is the amount of stock reserve (unrealized profit) required to reduce the branch closing inventory to its cost price?

On 31st December 2025, the Head Office Current Account in the books of an independent branch showed a credit balance of ₦133,000, while the Branch Current Account in the Head Office ledger showed a debit balance of ₦189,000. Upon investigation, the following reconciliation items were discovered:

1. Goods in transit sent by the Head Office to the Branch valued at ₦24,000 were not yet recorded in the Branch books.
2. A cash remittance of ₦18,000 sent by the Branch on 28th December 2025 was received by the Head Office on 4th January 2026.
3. A management fee of ₦7,000 charged by the Head Office was mistakenly debited to the Head Office Current Account in the Branch ledger.

What is the correct reconciled balance of the inter-company current account at 31st December 2025?

A head office supplies merchandise to its dependent branch at cost plus $50\%$. At the end of the accounting period, the branch holds closing inventory valued at $\text{₦}18,000$ at invoice price. What is the amount of unrealized profit to be removed via the Stock Reserve account?

Match each inter-entity reconciliation transaction scenario between a Head Office and an Independent Branch on the left with its appropriate adjusting journal entry on the right.

Abeokuta Head Office operates a dependent branch in Sagamu, supplying all goods at cost price. On 1 January 2025, the Branch Debtors Account had an opening balance of $\text{₦}15,000$. During the year ended 31 December 2025, credit sales recorded by the branch were $\text{₦}68,000$. Cash collected from debtors and remitted to the Head Office totaled $\text{��}54,000$. Additional adjustments revealed discounts allowed to debtors of $\text{₦}2,000$, bad debts written off of $\text{₦}1,000$, and returns from debtors to the branch of $\text{₦}3,000$. What is the closing balance of the Branch Debtors Account as of 31 December 2025 in Nigerian Naira ($\text{₦}$)?

Match each dependent branch transaction (recorded at cost price) with its corresponding double-entry posting in the Head Office ledger.

A branch received goods from its head office invoiced at $\text{₦}75,000$, which includes a profit margin of $20\%$ on the selling price. If one-third of these goods remain unsold at the end of the period, what is the amount of stock reserve (unrealized profit) needed for the closing inventory?

A head office invoices goods to its dependent branch at a selling price loaded with a mark-up of $33\frac{1}{3}\%$ on cost. At the end of the financial year, the head office records show goods dispatched to the branch at an invoice price of $\text{₦}180,000$, but the branch recorded receiving goods valued at $\text{₦}165,000$. The branch's physical inventory count at the close of the period showed stock on hand valued at $\text{₦}36,000$ at invoice price. What is the total stock reserve (unrealized profit) required for the combined closing stock, including goods in transit, at the financial year-end?

Port Harcourt Head Office operates a dependent branch in Owerri, supplying all goods at cost price. For the financial year ended 31 December 2025, the branch records showed the following transactions:

- Branch Stock (1 January 2025): ₦12,000
- Goods sent to Branch from Head Office: ₦60,000
- Goods returned by Branch to Head Office: ₦3,000
- Cash Sales: ₦45,000
- Credit Sales: ₦38,000
- Cash received from Debtors: ₦32,000
- Branch Stock (31 December 2025): ₦15,000

What is the gross profit realized by the Owerri Branch for the year?

Kano Enterprises transfers goods to its Kaduna dependent branch at an invoice price calculated as cost plus $25\%$. At the beginning of the financial year, the branch held inventory with an invoice value of $\text{₦}40,000$. At the close of the year, branch inventory at invoice price was $\text{₦}55,000$. What is the amount of the net increase in the provision for unrealized profit (stock reserve) to be credited to the stock reserve account at year-end?

Match each ledger account used under the dependent branch invoice price system with its primary accounting function.

Jos Head Office operates a dependent branch in Bauchi, supplying all goods at cost price. For the financial year ended 31 December 2025, the branch records show the following details:

- Opening inventory at branch: ₦15,000
- Goods sent to branch: ₦120,000
- Goods returned by branch to Head Office: ₦8,000
- Total cash sales at branch: ₦150,000
- Closing inventory at branch: ₦22,000

What is the gross profit realized by the Bauchi branch for the year?

Match each independent branch reconciliation scenario on the left with the correct adjusting journal entry required to reconcile the inter-entity accounts at the end of the accounting period.

Match each independent branch reconciliation scenario on the left with the appropriate adjusting journal entry required in the respective ledger books on the right.