i. Goods stolen on transit is an abnormal loss of stock and therefore the cost of the goods should be charged to the profit and loss-account of the branch maintained at the head office. The profit loading on these goods should be debited to the branch
adjustment account with selling price of the goods stolen being credited to the branch stock account.
ii. Where the head office increases the selling prices at the branch, the amount of the mark-up should be debited to the branch stocks account with a corresponding credit entry to the-branch mark-up account. However, if it reduces the selling prices to
boost sales at the branch level, the amount of mark-down in prices should be charged to the branch mark-up with a credit entry to the branch stock account.
Wilfykil answered the question on February 11, 2019 at 10:21
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