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Business, 01.06.2020 03:57 zoebtharpe

Ius Ltd is a company which deals in antiques. The Company is based in London and operates in the UK, but also has a profitable outlet in San Francisco, California, which is managed by one of the directors on his frequent trips to the States. Separate records are kept of the outlet’s transactions b the American staff.

The following trial balances were extracted from the books of Antiquarius Ltd at 31 December 2003
London San Francisco
£ £ $ $
Share capital 20,000
Retained Profits as at1 January 2003 20,200
Lease hold premises 15,000 40,000
Amortization of lease 7,000 8,000
Delivery vans, at cost 12,000 10,000
Provision for dep’n on delivery vans 6,000 5,000
Opening inventory, at cost 8,620 12,460
Accounts receivable 3,869 6,293
San Francisco current account 22,600
London current account 44,400
Sales 78,318 116,308
Transfers to San Francisco 21,600
Purchases 70,066 21,800
Transfers form London 38,620
Administration expenses 2,386 3142
Salaries and wages 17,420 23,500
Selling and delivery costs 5,485 8,940
Provision for unrealized profit 500
Cash at bank 6,923 13,879
Accounts payable 10,751 4,926
(Balancing figures) 164,369 164,369 178,634 178,634
You are given the following additional information:

(a) Transfers of goods from London to San Francisco are made at cost plus 20%.
(b) The average rate of exchange during the year was $1.80 to the £. The rates of exchange at 1 January 2003 and 31 December 2003 were $2.00 and $1.60 to the £ respectively.
(c) Inventory of antiques on hand at 31 December 2003 were:

London £ 12,470
San Francisco (including $9,180 of goods sent from London when the rate of exchange was $1.70)
$15,240
(d) Salaries and wages for London include director’s emoluments of £8,000 of which £3,200 is to be charged to the US outlet at the rate of exchange of $1.60 to the £1.
(e) Administration expenses accrued but not yet taken into account amount to:
London £800
San Francisco $760
(f) When the leasehold premises and delivery vans were acquired in San Francisco the rate of exchange was $2.20 to the £.
(g) Depreciation is to be provided for the year on the vans at 25% of cost, and the leases are to be amortized by equal amounts written off over the periods of the leases, which are:
London 15 years
San Francisco 10 years
(h) On 31 December 2003 London office had shipped a regency bureau to San Francisco at a value of £900. Although they recorded as a transfer in the London books no entry was made in the books in San Francisco until it was received on 20 January 2004.1. Compute the value of closing stock of the branch to be converted in the Trial Balance

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Ius Ltd is a company which deals in antiques. The Company is based in London and operates in the UK,...

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