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WAEC Financial Accounting 2014 Question 42

Question 42

Branch Accounts

Use the following information to answer questions 42 and 43.
Branch stock account (at selling price): D346,000 – debit
Branch mark-up account: D62,000 – credit
Calculate the stock figure to be included in the balance sheet at the year end.

  1. A.D408,000
  2. B.D346,000
  3. C.D284,000
  4. D.D62,000.
Show the answer and explanation

Answer: C (D284,000)

Explanation

Stock must be shown at cost: selling price 346,000 − mark-up (unrealised profit) 62,000 = D284,000.